The Canadian oil and gas industry has options to improve its future outlook, but it needs to re-think its reliance on the U.S. market, according to the chief executive of trucking services provider Mullen Group.
“The reality is this – the U.S. is the largest customer for Canadian crude oil and natural gas and they don’t need us anymore,” Mullen Group CEO Murray Mullen told BNN Bloomberg in an interview on Thursday.
“Our customers are trying to sell into a crowded market and they’re being discounted. The U.S. just don’t need us like they did. So, either we take the price that’s being offered or Canada has to make decisions to find new markets.”
U.S. President Donald Trump praised his country’s energy exports in Tuesday night’s State of the Union address.
“We have unleashed a revolution in American energy,” Trump told Congress. “The United States is now the No. 1 producer of oil and natural gas anywhere in the world. And now, for the first time in 65 years, we are a net exporter of energy.”
While the U.S. briefly became a net petroleum exporter during one week last November, government analysts say it will be at least September 2020 before the U.S. can claim the title on a steady basis, according to a Bloomberg report.
New oil and gas markets, Mullen said, could include domestic ones.
“Could I give the Premier of Quebec a call and say: Why are you not buying Canadian crude oil, but you’ll buy Saudi crude oil?” Mullen asked.
“Nobody’s giving us a reason as to why we would not move Canadian oil, from Western Canada to Quebec, but we’ll bring it in by tanker from Saudi Arabia.”
Mullen added that Canada’s oil and gas sector will continue to be hampered by delays on major domestic infrastructure projects, despite having a willing customer across the Pacific.
“Asia would take lots of Canadian oil, but you’ve got to get through British Columbia, i.e. Trans Mountain, i.e. Northern Gateway and those kind of things.”
“That’s the solution: Give us access to new markets.”
He added that the future could be even brighter for Canadian liquefied natural gas, but raised concerns over the mounting protests surrounding the LNG Canada pipeline and export facility.
“LNG is a huge growth curve and it’s only a matter of whether Canada can participate in the world market, because everybody knows that China and Asia want to move away from coal to cleaner-burning natural gas. Everybody knows that, but you’ve got to get your product to market,” Mullen said.
“There’s potential for natural gas, but that’s down the road. We’ve got to get through a couple more hurdles, but we’ve got a massive capital project sitting there … let’s go.”
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