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May 2, 2019

Crude-by-rail 'doesn't make sense to us': New Suncor CEO

Suncor's new CEO outlines his vision for the company


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The oil patch can not rely on crude-by-rail to move its product to market, according to Suncor Energy Inc.’s newly appointed chief executive officer.

“The cost of moving crude by rail is about twice what it is moving by pipeline,” Suncor CEO Mark Little told BNN Bloomberg in a Thursday interview.

“There’s no sense in us putting new facilities and doing significant investments and then shipping it to market in an inefficient way. It just doesn’t make sense to us,” he added. “We need to understand where we’re at on the pipelines.”

Little, who has been a Suncor executive since 2008, officially took the reins this week from outgoing CEO Steve Williams. The former CEO blasted Canadian competitiveness on his way out the door, telling BNN Bloomberg in an interview last week that “there is a lack of confidence that Canada is actually open for business.”

One way for the energy firm to move forward with its energy logistics plans, Little added, was to include indigenous investment in major infrastructure projects. The notion of indigenous investment, particularly in the embattled Trans Mountain expansion project has been a hot debate topic within Canada’s First Nations communities.

“We would love to see the First Nations and indigenous peoples of the country participate in that,” Little said.

“This is an excellent opportunity and one of the reasons for that is it can provide long-term stable cash flows, literally for decades that then they can start planning long-term around some of the investments they would make in their own community and their own people.”

However, Little does not support the idea of Alberta stopping the flow of oil to British Columbia. New Alberta Premier Jason Kenney has vowed to protect the province’s energy sector and did not rule out instituting a law passed by his predecessor, Rachel Notley, to turn off the taps to B.C.

B.C. Premier John Horgan responded on Wednesday by taking Alberta to court over the law, which the province deemed “unconstitutional.”

Little said the rift between Canada’s two westernmost provinces is bad for Suncor’s business.

“Our customers, although our refinery is sitting in Edmonton, it literally provides product from the [Pacific] coast all the way through into Manitoba, all across Western Canada,” he said.

“We’ve had many of our customers in B.C. for decades. Our hope is that they’ll come to a negotiated settlement, because the last thing we want to do is be impeded from serving our customers.”