Thank you, Chair, and thank you, committee members, for the opportunity to speak to you today.
This topic of energy exports is critical to Canada's economy and to its global influence and power, and it's essential that we better position ourselves for success.
Canada is a world-class energy producer with well over a century of reserves of oil, gas and uranium. To reiterate what Mr. McTeague said, Canadian energy exports are worth over $200 billion, about 90% of which is oil and gas. According to NRCan, oil and gas comprised 26% of Canadian exports in 2024.
I will focus my remarks on oil and gas, but I would be pleased to further discuss uranium, electricity, propane and coal during questions. I would just note that Canada has recently become as likely to import electricity as to export it, a stunning and unfortunate turn of events, and this state of affairs deserves much more attention.
Until 2024, Canadian oil and gas exports went almost exclusively to the United States via pipeline. It is only with the start-up of the Trans Mountain pipeline and LNG Canada that we have become a global rather than a regional exporter.
Although the cost overruns of TMX are well known, the pipeline itself has proven its worth again and again. It narrowed the differential, or the price difference, between WCS and WTI crude oil benchmarks by about six to eight dollars a barrel, adding billions in revenues, royalties and taxes, even before accounting for the additional volumes we've been able to send to global markets. Those additional volumes are significant.
Although Trans Mountain has not been in service for even two years, it is already running very full. Last week, it ran at about 825,000 barrels a day, or 92% full. This is despite very high tolls for Trans Mountain, which are more than double the cost of sending crude to the Midwest. Recent data shows that tolls were about $14.40 a barrel from Edmonton to Westbridge, in B.C., but only $6.60 from Edmonton to Flanagan, Illinois.
Our crude oil exports to the United States have now dropped from what used to be an average of about 97% of the total to just 84%. China counts for about 10%, with the remainder going to other countries, including Spain, India, Hong Kong, Singapore and South Korea.
It's clear from Prime Minister Carney's and Minister Hodgson's recent trips to China and India that there's an appetite for more Canadian oil and gas in Asia, and that this will be key to any trade diversification strategy we advance.
Canadian oil and gas producers are world-class operators and will incrementally grow production and global market share when they get new pipeline space to fill. The situation today is relatively healthy. LNG Canada has started up its second train very recently and is still ramping up exports. Cedar LNG, Woodfibre LNG, Ksi Lisims LNG and LNG Canada phase two are expected to reach a final investment decision in 2026.
For pipelines, the immediate focus is on expanding what we already have. Enbridge has already announced the optimizing of its main line to the United States of up to 400,000 barrels a day over two phases. Trans Mountain is planning an expansion of up to 360,000 barrels per day. Coastal GasLink was built to already accommodate LNG Canada phase two.
We need two new pipelines in the medium term. The first is the Prince Rupert Gas Transmission, which is already approved and on the Major Projects Office list. It is intended to serve Ksi Lisims. We can sequence that pipeline building in northwest B.C. by planning to build the west coast oil pipeline, which Alberta is leading, right after PRGT is finished. That means we must get our ducks in a row now. We don't need a new million-barrel pipeline today or tomorrow, but we will need it around 2031 or 2032, and that absolutely means that the planning and execution must start now.
Alberta and Canada should take the necessary steps to develop a route, submit a project, conduct the duty to consult, clear initial legal and regulatory hurdles and financially de-risk a new oil pipeline through indigenous loan guarantees, to the point where a private proponent feels confident that the pipeline can be built in Canada in a reasonable amount of time and that we are once again a safe place to invest capital.
Private proponents must consider Canada safe to invest in for upstream production as well, in order to fill these new oil and gas pipelines to reach new global markets. Although the rhetoric and focus on being an energy superpower are much improved, there are mixed signals coming from the policy side: for example, in methane regulations, carbon pricing and indigenous consent. These need to be addressed for us to meet the lofty goals Prime Minister Carney has set for us as a nation.
Thank you. I look forward to questions.