People get a laugh out of those silly explorers of yore who headed out looking for China but ended up bumping into the inconvenient continent of North America. The Montreal suburb of Lachine is a reminder how folks were convinced the land of silk and spices was just a brisk paddle down the St. Lawrence River.

This improbable trade route, westward from Paris to Hong Kong, comes to mind with the recent decision by a Canadian government agency to allow a New Brunswick-based oil company to ship crude from Alberta through the Panama Canal to its refinery in Saint John.

Irving Oil got the green light to load that oil, piped from the tar sands of Alberta to a terminal in British Columbia, onto foreign-owned tankers, and then ship it along the Pacific coast, through the canal, through the Caribbean and then up the Atlantic seaboard to its giant refinery. The trip is approximately 7,500 miles, with a load of less than a million barrels of oil.

While Irving’s decision to use this circuitous route may not make sense geographically or economically, it is at least in part motivated by the scrapping of what seemed like the logical solution to the challenge of getting oil from Canada’s west to refineries in the east.

That solution was the Energy East pipeline project proposed in 2013 by Transcanada Corp, (now called TC Energy) one of Canada’s largest energy infrastructure players. The plan was to convert an existing 1,900 mile natural gas line, and build 900 miles of new line through which millions of barrels a day would flow from west to east.

The catch was most of that new line would have run through Quebec, along the St. Lawrence and through many populated areas of the province. Opposition from politicians, environmentalists, indigenous people, farmers and others eventually forced Transcanada to spike the $15 billion project in 2015. Uncertainty about oil prices also played an important role in Energy East’s cancellation.

Alberta’s challenge of getting its massive oil production to market has since been an issue of deep concern to the province and Canada as a whole, since energy revenues account for more than 10 percent of the gross national product. It has also become the focus and flashpoint for the battle between environmentalism and energy economics. The federal government of Justin Trudeau has been trying with mixed success to balance the two competing interests.

Ironically, and to add another layer of improbability to Irving’s Panama Canal plan, the Alberta oil will travel along a pipeline to a seacoast terminal both owned by Trans Mountain Corporation. The Trudeau government purchased Trans Mountain two years ago from its American owner, Kinder Morgan after it bailed on its pipeline expansion project in frustration over regulatory delays and opposition from various groups. Construction is now underway on that 700-mile expansion project.

In the same announcement of its Panama Canal plan, Irving said it intends to eventually pick up more Canadian oil by tanker from terminals in Texas and Louisiana. That oil, some 800,000 barrels a day, travels from Alberta to those terminals on the Keystone pipeline owned by TC Energy.

That volume, in Alberta’s view, is not enough to justify production at the massive extraction operations in the province’s oil fields, which contain some 168 billion barrels of known reserves. Current production - prior to the pandemic, of course - was around three million barrels a day.

A major hope for Alberta’s problem is the Keystone XL project, another TC Energy venture, which would see a 1,100-mile new line built from Saskatchewan to Steele City, Nebraska. If you’ve been following the news on this, you’d know presumptive Democratic presidential nominee Joe Biden issued a statement last week saying he would rescind permits for the project, as his former boss Barack Obama had done.

Rare are the occasions when Justin Trudeau and President Donald Trump are on the same page, but when it comes to Keystone XL, the prime minister heartily approved the president’s signature on the project’s go-ahead in 2017. Construction is now well underway, including into Montana where the pipeline crosses the border.

The Alberta and Canadian governments are both talking resorting to trade bodies in the event a Biden administration tries to block the project.

Premier Jason Kenney had this retort: “If we don’t get that pipeline built, the United States refineries along the gulf coast will once again have to be dependent on OPEC oil imports for heavy oil, in particular from dictatorships like Venezuela.”

As much as Trump has stirred the anger and amusement of Canadians, key players up here say Biden’s pipeline stance could bring direct and tangible harm to the Canadian economy.

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