The opportunity costs of not exporting natural gas and oil remain enormous
Manitoba premier Heather Stefanson finally voiced support for more energy exports out of Hudson Bay. That is excellent news because the potential is real and the reasons to refuse are illusory.
“We are looking at liquefied natural gas, primarily,” Stefanson told reporters recently.
“We know with the energy challenges in Europe, with the horrible situation there, the shortage of food potentially, that Manitoba is well-positioned with the Port of Churchill to be able to look at what that could mean in the long term for our province.”
This was welcome clarity from Stefanson after more than a month of mixed messages and from a government that doesn’t like to think “big”.
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On October 13, Stefanson announced that she would visit Churchill, Thompson and Flin Flon “to promote jobs, tourism and economic opportunities.” The release reminded readers of the joint $147 million investment by Ottawa and the Manitoba government so the Arctic Gateway Group (AGG) could upgrade and rebuild its line.
Eleven days later, Alberta Premier Danielle Smith wrote Stefanson and Saskatchewan Premier Scott Moe to propose a meeting in Churchill to discuss export possibilities for food, energy, fertilizer, and more.
But Stefanson was strangely reticent.
“I will tell you there are more pressing things for us to be dealing with right now,” Stefanson said, naming affordability, healthcare, and homelessness. She also wanted to ensure First Nations were okay with further developments and the federal government was on board.
This reluctance made no sense. There’s no better social program than a job, and governments can’t do anything without revenues. Given that the AGG is a partnership between 41 First Nation and Bayline Communities, would they object to more business? As for Ottawa, did it want its investment to be for nothing?
Conservative leader Pierre Poilievre already knew Churchill was a worthwhile political and economic bet. While travelling through Manitoba in April, he said if he became Prime Minister he would fast-track export and shipping permits to send 100,000 barrels of oil a day by rail and 200,000 by pipeline right to the Port of Churchill.
On Tuesday, Federal Northern Affairs Minister Dan Vandal seemed positive about developments. And the most opposition the NDP could muster was that Manitoba-made hydrogen should be shipped down the line and through the port. In the near term, unfortunately, this is pie in the sky and years away from reality, if ever.
Recently, Ottawa and the Alberta government announced $476 million for a net zero hydrogen plant in Edmonton set to be the world’s largest. Blue hydrogen would be derived from natural gas, with the carbon removed and sequestered. The hydrogen would be converted to anhydrous ammonia for shipping. Don’t hold your breath folks.
Meanwhile, the opportunity costs of not exporting natural gas and oil remain enormous. Energy expert Terry Etam calculates that the revenues from a natural gas pipeline and LNG to Asia would generate $2.8 billion in tax revenue PER MONTH if Canada had its act together.
Of course, investments in Churchill don’t preclude wider development around accessing tidewater ports on Hudson Bay. A rail line already runs to Port Nelson at the mouth of the Nelson River without the headaches of repairing the muskeg-impaired rail line to Churchill. The proposed Neestanan Utility Corridor to Port Nelson, which also involves First Nation partners, nicely complements Churchill as a terminus for oil and gas exports.
After too many years of finding ways not to make things happen, it’s time Canada got it right.
Lee Harding is a research associate at the Frontier Centre for Public Policy.
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