The role of the Canadian government in both the short and long term should be to embrace and foster the growth of all parts of our diverse economy. The government should certainly not champion some sectors and demoralize others. Sadly, we have already started to see that approach by the Trudeau government.
Environmental and citizen groups in Quebec are demanding the National Energy Board explain why it refuses to order a hydrostatic safety test of Enbridge's Line 9 pipeline, a west-to-east oil pipeline that could come online as early as next month. A hydrostatic test or hydrotest is a commonly used method to determine whether a pipeline can operate safely at its maximum operating pressure. The test involves pumping water through the pipeline at levels higher than average operating pressures.
Canada's energy sector service and equipment exporters are in for tough times, and cash flows for oil and gas exporters will tighten significantly. This is already beginning to spill red ink on Canada's trade and fiscal statistics. However, Canada's non-energy sector exporters should see a substantial boost.
In the wake of the Lac-Mégantic oil-by-rail disaster, when a train carrying crude oil from North Dakota's Bakken field exploded in Quebec, some people began to characterize Bakken crude oil as "uniquely flammable," with an implication that new rail car standards might be required to move the material.
Discussions surrounding the need for new pipelines to transport Canada's oil to market have been a dominant economic, environmental and political issue for the past several years. Canada's overwhelming reliance on the United States as a customer, the U.S.'s growing energy self-sufficiency, and limited pipeline infrastructure have placed a low ceiling on the prices Canadians are able to secure for our energy exports.
We're producing so much oil sands crude that we've overwhelmed cross-border pipeline capacity. Now the industry is stuck in a Catch-22. Profit margins have dropped dramatically. To reassure investors, bitumen miners talk about dramatically expanding production. But the more we produce, the more we exacerbate the supply glut.
By the end of this month the federal pipeline regulator, the National Energy Board (NEB), is expected to approve Enbridge's proposal for its 38-year old Line 9 oil pipeline in Ontario and Quebec, which would carry shale oil -- known for its propensity to explode as it did in North Dakota. With that in mind, the province of Ontario must hold its ground on Line 9 and ensure its demands for a safer pipeline are met.
Yet another train derailment involving petroleum products has re-invigorated the debate over how we transport oil in Canada. Reflexive opposition to pipelines flies in the face of the data, which shows that pipelines are safer modes of transport than railways or roadways. Environmentalists engaging in anti-pipeline crusades risk causing more harm than good as their pipeline-stalling actions divert oil transport to rail and road that would otherwise be transported more safely by pipeline.