What does U.S. capture of Venezuelan president mean for Alberta oil?

Some say the American capture of Venezuelan President Nicolás Maduro could represent a long-term threat to Alberta’s oil patch and provincial coffers.

Others believe the threat to the province’s oil producers is exaggerated.

U.S. President Donald Trump has floated a plan for U.S. oil companies to help rebuild Venezuela’s oil industry following Maduro’s arrest over the weekend.

“We’re going to have to have big investments by the oil companies to bring back the infrastructure,” said Trump, making it clear he wants to extract trillions of dollars worth of energy from the South American country.

Much of it is similar to the heavy crude that Alberta currently exports to American refineries.

Alberta Premier Danielle Smith – making a statement while out of the country on vacation – says Maduro’s capture underlines the urgency of building oil pipelines to export Canadian oil to new markets.

But political scientist Duane Bratt points out Smith has been fighting for new pipelines for years.

“The pipeline rationale is there,” Bratt told CityNews. “I’m not convinced that it’s because of the problems in Venezuela.

“It’s one thing to cite Venezuela’s vast oil resources; it’s another to talk about how bad their oil infrastructure is. It is going to take a long time and billion and billions and billions of investment to get Venezuela back to where they were in the 1970s. And if I was an oil company, I don’t know if I would be investing in Venezuela right now.”

Still, Maduro’s capture appeared to rattle confidence in Canada’s energy industry on Monday, with shares of the country’s biggest oilsands producers coming under pressure.

Canadian Natural Resources Ltd. closed down about six per cent on the TSX, while Cenovus Energy Inc. finished almost five per cent lower and Suncor Energy Inc. dipped 1.6 per cent.

Enbridge Inc., which operates a vast cross-border oil pipeline network that it plans to expand, and South Bow Corp., whose Keystone system ships crude to the U.S., each fell around three per cent.

Overall, the TSX energy subindex was down about 3.6 per cent.

The price of oil, though, was mostly stable, with the benchmark West Texas Intermediate hovering around $58 a barrel midday.

The leader of the Alberta Republicans is urging Smith’s government to start looking for savings in case oil revenues tumble. A $6 billion deficit is already projected.

“This government in Alberta is spending more than Rachel Notley’s government did,” Cameron Davies said. “They do not hold the title of being fiscally conservative on any front. So, we have a major spending problem in Alberta; the revenue problem is becoming more and more grim.”

Alberta is expected to formally apply for a new pipeline to British Columbia’s West Coast early this year, with the goal of reaching markets in Asia.

In November, Smith signed an agreement with Prime Minister Mark Carney, paving the way to a potential Indigenous co-owned bitumen pipeline and to claw back environmental policies standing in the way, including the B.C. tanker ban. 

The deal aims for Alberta and Ottawa to agree on an industrial carbon price by April 1 and sets a July 1 deadline for a pipeline proposal to Ottawa’s Major Projects Office.

Smith said her government is continuing its work to submit that application and expects the federal government to move forward “with urgency.”

Carney didn’t mention oil in his initial statement on Venezuela but has acknowledged the importance of that project to a strong Canadian economy.

–With files from The Canadian Press