If the country doesn’t get off the dependence of the United States for oil exports, Canada could be in for troubling times, according to Alberta Senator Doug Black.
In a one-on-one interview, Black said that by being dependent on the United States for oil exportation for so long, he doesn’t see a end in site for the low oil prices that Canada is seeing right now.
“The price of oil has fallen effectively 50 per cent in six months,” said Black. “That is a big problem for Alberta, and that is a big problem for Canada.”
With the boom and bust that the oil industry sees on a regular basis, Black is encouraging the premier of Alberta (Jim Prentice) to restructure how revenue is raised in Alberta.
“We have to have an open discussion about this,” he said. “We have to have to have a really hard look at the expenses in the province as well.”
Black said that what is good for the provinces is also good for the country, so he thinks that the government will have to cut spending in the next budget expected out in the coming months.
“I think it will happen,” he said. “Canada is not as dramatically affected by the fall in oil prices.”
Black said making those cuts is one of the reasons why federal Finance Minister Joe Oliver announced last week that he would be tabling the 2015 budget in April, rather than in March when most budgets are tabled.
“We need to understand how far this stone is going to fall,” Black said about falling oil prices.
With the falling oil prices, Black is setting out on a cross-country tour meeting with economic clubs to discuss what the country could do to offset the falling prices of oil.
“It’s now a matter of national imperative,” Black said of moving forward on the three pipelines in Alberta.
Keystone XL Pipeline, which would bring crude oil from Alberta to the Gulf Coast in New Orleans; Energy East, which would bring oil to the east coast of Canada; and Northern Gateway, which would send crude oil to the Pacific Ocean.
“Canada is being penalized,” according to Black. “Like I have been saying for the past year and a half, it’s the generation below mine, that I want to enjoy the prosperity that my generation enjoyed.”
Black bluntly said, “If we do not get this right it’s not going to happen.”
The current price of oil is at a level that Black thought he would never see, “I would of never thought I would of seen it.”
Black said that time for action is not on Canada’s side, “We have to got to ensure that we get ahead of aboriginal engagement, market access, and doing what is required to ensure that we are the global environmental leader.”
The senator has hopes that the country can do it, “but we have to get together as a country and do this.”
Asked directly if Canada has seen the bottom of the oil price drop, Black didn’t want to speculate, “I only know what I read, and currently Goldman- Sachs says to look for the bottom of the drop to be around $40 per barrel.”
Black said he doubts the oil prices to reach the highs of $150-160 per barrel any time soon.
“The world is awash in oil and gas, and that is the reason why Canada was having troubles with market access for oil.”
Black said that the United States have become self sufficient in oil and gas, and no longer needs to rely on Canada as a supplier for oil.
“They need our product, but they don’t need it like they have in the past,” Black said.
Asked if that means the state of the Keystone pipeline will be pushed back further, Black said he doesn’t expect it to be passed till after the 2016.
“I do not see a light at the end of tunnel when it comes to Keystone, I don’t expect to see a light until the a new president is sworn in, and I really hope I’m wrong on that.”
Black said that as Canada diddles around on the energy file, “the world is moving ahead without us.”
Black was appointed to the Senate in 2013 by Prime Minister Stephen Harper. He currently sits on the Senate Committee of Natural Resources, Energy, and Environment.