Transport committee  I guess the question would be, under what view of future refining margins? Building a new refinery—and I've written on this a lot—is an economically challenging proposition unless you create restrictions that make it economically viable. In a way this legislation would change the economic case for a refinery because one way to avoid—

Transport committee  It would be for the better, at the expense of the value of our crude. It's not creating value; it's just transferring value in the supply chain. If you can't move out heavy fuel oil, light fuel oil, waxes, lubricants, or whatever else you want to produce in an economically efficient way, then you're cutting at that value of the refinery.

Transport committee  Again, I'm by no means an expert in spill response or behaviour of spilled petroleum, so I want to avoid making any comments in that area. In terms of where I highlighted the list and where I think there are some issues, first of all, insofar as it would relate to any potential refining asset on the west coast, understand that those refineries produce a wide slate of products.

Transport committee  I think the biggest difference here is that the exclusion zone is transit, not port call, whereas this is a port call bill. It's not an innocent passage bill; it's a bill that prevents what the exclusion zone does not prevent currently, which is large vessels moving into harbours, principally in Prince Rupert but in other deepwater harbours as well.

Transport committee  It allows you to get there with some of the barrels, but it doesn't let you get all the barrels there. We saw as of last week the gap between WTI and Brent blow out above five dollars, so right now on the difference between shipping our crude into that U.S. mid-continent market versus shipping it by rail to the west coast, you're getting close to a point where you'd be better off shipping by rail west as opposed to into the Midwest by pipe.

Transport committee  Well, it's movement of about 800,000 out of western Canada. How it changes our export capacity depends on how they configure their loading terminals and what have you. But I'd say that's a pretty good estimate for what it does to our export capacity.

Transport committee  Yes, and the caveat in the bill of preventing ship-to-ship transfers as well.... Most of your traffic that would be for commercial export is not going to be on a small general-purpose tanker. It's going to be on a panamax or aframax, or larger, so 10 times that size.

Transport committee  Yes. If you tighten the limit any further, you're not changing the commercial viability of export-type transactions. Whether I ship 12,500, or 3,000, I'm not moving that. It does speak, however, to Mr. Lewis-Manning's question about how it prevents you from having multiple-pooled cargoes, and these sorts of questions in there.

Transport committee  We're at essentially full today. It depends, month to month, but for all intents and purposes, we're maxed out right now.

Transport committee  Based on CAPP's most recent forecast, if you build in Keystone XL, the Trans Mountain expansion, and then the smaller incremental expansions, Line 67 and Line 3, then for the remainder of that CAPP forecast horizon, we have sufficient pipeline capacity. You don't need any incremental pipeline capacity.

Transport committee  If you assume that we're not hampering our total export capacity for crudes, I would be careful about export capacity for other refined products. I'd also be careful about the concept I opened with, which is the maximum value of our resources. Even though you may have pipeline capacity, some of that pipeline capacity goes into what has been and remains a discounted market in the U.S. mid-continent, so having that ability to move some products west might remain a strategically important asset even if it weren't a logistically crucial asset.

Transport committee  Thank you, Madam Chair. Thank you very much for inviting me to be here today. In the remarks that follow, I'm focusing mostly on elements related to my areas of interest, which are crude markets and energy markets in general as well as the impact of the proposed ban on our ability to maximize value from our resources and from the processing of the resources.

Finance committee  I didn't see that particular comment. I saw him saying it was maybe a front-loaded oil shock.

Finance committee  I didn't see that particular comment. I think we do see that it is going to take a while for the demand side to adjust and take advantage of low prices here, but that's not a uniquely Canadian thing. That's everywhere. It's in the U.S. economy. It's in the global economy. I think we also need to realize that the effects, like the effects of the boom, are unequally distributed, so whereas Alberta took the lion's share of the benefits in the upswing, it is also going to take the lion's share of the costs—Alberta, Newfoundland and Labrador, and Saskatchewan to some degree.

Finance committee  It comes back to what I had said earlier, that really what we're seeing from the Saudis is non-action. It is continuing to produce much as you would expect a competitive producer to act. What they have seen is an erosion of their market power from the factors that Mr. McLellan mentioned.