New energy infrastructure could stabilize gas prices
Posted Aug 2, 2013 07:28:08 AM.
This article is more than 5 years old.
A couple of major pieces of energy infrastructure are coming east.
Irving Oil says it will build a $300 million marine terminal in Saint John to handle crude oil flowing from Western Canada, after Trans-Canada announced it will proceed with its Energy East pipeline project.
Even though the end of the line is in New Brunswick, it’s still good news for all Maritimers, and there is at least some hope the projects could help stabilize gas prices.
If it all goes as planned, everything should be built by 2017/18.
Energy analyst Dan McTeague told News 95.7 it’s a big deal because we’ve lost a lot of refineries in Eastern Canada.
“I think it’s going to mean you’re going to have greater, more secure access to extra oil which usually means a damper on prices,” he said.
While we won’t see a price drop overnight, he explained the way the market has operated over the last five years is that oil and gas prices go up based on rumored scarcity.
“Scarcity could be things like Eastern Canada no longer having affordable oil and it has refineries that are potentially shutting down, therefore the premium we’re paying or that we were going to pay on gasoline, if the last five years is any indication, could be and extra five or ten cents a litre,” he said.
McTeague is optimistic this pipe and facility should help to eliminate those concerns in the Maritimes.
“It’s far more expensive to import oil from Europe or from other places subject to volatility created by all sorts of other circumstance,” he said, adding the new pipeline and facility is a big step towards a strong, completive national energy strategy.
“Every province is going to benefit from this and it won’t just be a short-term job situation as they make new pipes, it’s also the maintenance and it’s also stability in terms of energy pricing,” explained McTeague. “So this step really forestalls major price shocks, certainly in Eastern Canada and particularly in the Maritimes.”
As with a lot of projects of this nature, there are environmental concerns but McTeague noted we’ve seen a major train derailment and an oil tanker run aground recently, so short of building a cross-country canal this is as safe as it gets.
