Listen Live

- Advertisement -
HomeNewsHigher gas prices could be tip of the iceberg according to Petroleum...

Higher gas prices could be tip of the iceberg according to Petroleum President

“We need to pay attention to where our resources come from.”

That’s from Canadian Association of Petroleum Producers President and CEO Tim McMillan as the Russian invasion of Ukraine continues.

Last month, Ottawa banned crude oil imports from Russia at the end of February.

This has led to surging gas prices in the north.

In an interview with Vista Radio, McMillan hopes the invasion forces the federal government to re-think its position on pipelines following the cancellation of major projects like Energy East, Northern Gateway, and Keystone XL (nixed by the Biden Administration).

“We have got ourselves in a situation where the private sector and global investors have stopped coming to Canada with new energy infrastructure projects.”

“I hope that this is a wake-up call where Canada re-assesses the role that we play for our allies and ourselves. We need to reposition ourselves to take a front-footed approach to be a global supplier of choice.”

McMillan is of the belief that unless the approach changes within parliament the higher gas prices we are paying will be just the tip of the iceberg.

“And unless countries like Canada, the United States, and even Australia increase their capacity to be the global suppliers of choice and take that from Russia and the Middle East we are going to be vulnerable for years and decades to come.”

“Canada has become a country that is limiting its own capacity to supply our own citizens with and to be global contributors to supply democratic oil to the world. But, the bigger challenge is building anything in Canada. We see this sort of opposition be it for a power project, a hydroelectric dam, power lines, pipelines, and even LNG facilities.”

The former Saskatchewan Party MLA noted that following the 9/11 terrorist attacks in the United States every one in the world was on the hunt for democratic sources of energy.

However, in the last decade, this has not been a priority for world leaders.

“Places like Europe have increasingly turned towards Russia and the Middle East. It’s times of crisis like today where we realize the importance of ensuring countries like Canada can play a leadership role in being a long-term supplier for those countries that are so vulnerable,” added McMillan.

“Russia’s aggression is only enabled because the European countries and North America that imports Russian oil as well (before the invasion) have been unable to push back appropriately.”

Earlier this month, Alberta temporarily dropped its 13-cent a litre gas tax to provide relief for drivers at the pumps.

In addition, the Canadian Centre for Policy Alternatives branch in BC is of the opinion higher prices simply mean bigger profits and that implementing an excess profits tax might be a way to curb what we are seeing at the pumps.

However, McMillan stated fuel prices are generally tied to two components.

One is the cost of the underlying resource (world oil price) while the other is taxation – both of which are substantial.

“The refining costs are relatively minor but the taxation on Canadian gasoline has increased dramatically in the last decade. The carbon tax, which will be going up in April, is something that will be felt every time you fill up.”

“On the global oil price, that is a function of global supply to global demand, the policies that have been put in place within Canada have very much limited the investment in Canadian resource development.”

McMillan believes any solution to the problem starts and ends with the federal government.

“In the short term, I think having our federal government identify that this is a national priority and that building infrastructure to get Canadian resources to Europe is a national imperative as well as acknowledge they will take the actions needed to streamline the regulatory process.”

Continue Reading