CALGARY — The perception that Canada is a more difficult place to build major energy projects is accurate, according to U.S. analysts, although opposition to such projects is growing in both countries.
Speaking in the wake of a decision by Teck Resources Ltd. to cancel its $20.6-billion Frontier oilsands mine, they say geography is part of the problem as pipeline projects in Canada tend to cross more borders and Indigenous territories than typical projects in the United States.
Adequate pipeline access from the Alberta oilsands to export markets was one of the issues Teck said it must solve in order to proceed to construction of the mine.
New York-based analyst Phil Skolnick of Eight Capital says pipelines to bring oil and gas from the burgeoning Permian region in northern Texas to the Gulf Coast, for instance, can be built entirely inside state borders.
Pipelines that cross several state borders, however, such as the Keystone XL pipeline between Alberta and the U.S. Midwest, have been delayed by opposition on the U.S. side of the border after easily winning approval on the Canadian side.
Jennifer Rowland, a senior analyst in St. Louis, Mo., for Edward Jones, says Indigenous and environmental opposition to the 1,930-kilometre Dakota Access pipeline resulted in delays in 2016 and 2017 but it was built after law enforcement agencies enforced its regulatory approvals. She says the reluctance of Canadian law agencies to provide similar enforcement for approved projects is a competitive disadvantage.
“We’re talking about some pretty long-haul pipe that touches a lot of areas, a lot of communities, a lot of different Indigenous groups and I think that’s where it starts to get really messy, really quickly,” she said.
“And that, I think, is part of the bigger challenge in Canada than in the U.S.”
This report by The Canadian Press was first published Feb. 25, 2020.
Companies in this story: (TSX:TECK.B)
The Canadian Press
Do you have a news tip or a story idea?
Send it our way!