Gateway Gazette

NDP Crude-by-Rail Plan a Risky Venture

EDMONTON, AB: United Conservative leader Jason Kenney has issued the following statement, following this week’s crude-by-rail announcement from the NDP government:

“The NDP has created a fiscal train wreck, putting Albertans on track for $100 billion in debt, and now the NDP is adding $4 billion tax dollars to that debt for a risky venture in the middle of the legal campaign period.

“This desperate move is a result of the NDP – Trudeau alliance shutting down pipelines. The NDP opposed Keystone XL and Northern Gateway. They did nothing to fight Trudeau’s killing of Energy East. They have done nothing meaningful to fight the NDP blockage of Trans Mountain in B.C. Their failed alliance with Justin Trudeau helped to create this mess.

“When the NDP first announced its plans to spend billions on rail cars, we said this made little sense because the private sector was already investing in building more rail cars, and government intervention would only interfere in the market, raising the cost of new cars for everyone.

“By dropping their earlier plan to buy rail cars, we can see once again the UCP is leading and the NDP following, as was the case with our call for turn off the taps legislation, and curtailment.

“The UCP will do everything within reason to support increased export capacity for Alberta oil, but we will not allow the NDP to write a multi-billion dollar cheque that taxpayers can’t afford.

“The private sector had already contracted with rail companies to move approximately 200,000 barrels per day of Alberta oil. That has since been cut because the smaller price differential created by curtailment of oil production has made rail movement less economical. In other words, the market for rail is functioning, and this government intervention will bid up the cost for the private sector to contract more rail shipment.

“Producers indicate that when curtailment eases, they are likely to contract for additional rail shipment. What the government has done today makes that less likely, moving the costs and risks from oil companies to Alberta taxpayers, when we can least afford it.

“A lot of additional pipeline capacity is scheduled to come on stream. Enbridge Line 3 completion, plus main line optimization, should increase takeaway capacity by approximately 400,000 barrels per day.  There is also consideration of reversing the Southern Lights pipeline if there is shipper interest.  Government interference in the market could have unintended consequences and potentially result in delay of long term solutions. That would be tragic.

“By 2022, Alberta is projected to be producing close to 4 million barrels per day of oil. Spending $4 billion tax dollars to move an additional 120,000 barrels per day will not make a significant difference.

“What we need are pipelines. That is why the United Conservatives will implement a fight back strategy to create a national coalition that demands pipeline completion as part of our demand for a new deal for Alberta.

“The NDP has created a fiscal train wreck, driving Albertans to a $100 billion debt. We can’t afford to add another $4 billion in debt to do something the private sector was already doing.

“That’s why we have said that every contract signed by this desperate government during the current legal campaign period will be subject to a rigorous review to determine if it was signed in good faith, is in the public interest, and represents value for taxpayers’ money.

“If elected, a United Conservative government will subject this proposal to that value for money review.”

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