Regulatory Roadblocks May Hinder India’s Push for Expanded Canadian Energy Imports
India wants more Canadian oil and gas, but regulatory hurdles and a lack of infrastructure to transport fuels to market here are hampering the country’s ability to get the energy it needs to feed its growing economy, says Dinesh Patnaik, India’s High Commissioner to Canada.
The South Asian country offers a massive opportunity for Canada’s oil and gas sector, with energy consumption there set to skyrocket over the next 25 years. Half of the world’s increased demand for oil is expected to come from India, Mr. Patnaik told the Global Energy Show in Calgary on Wednesday.
India imports roughly 90 per cent of its oil and gas. But with the lion’s share coming from the Middle East, the country has been left scrambling since the beginning of the war in Iran.
Now, it is looking for “unhindered supplies from jurisdictions which are safe, reliable, and which do not change with geopolitical risks,” Mr. Patnaik said.
Therein lies the opportunity for Canada.
“Anything that is on offer, we are willing to take as long as we can have it delivered to our doorstep,” Mr. Patnaik said.
The problem is that Canada largely lacks the ability to get fossil fuels directly to jurisdictions that need it, such as India, he said. It is a complaint made often by Alberta’s oil sector, and the driving force behind the province’s push for a new pipeline to the West Coast.
“We’re buying Canadian resources through the U.S. – through the Gulf Coast, through other channels – but we still haven’t set up the system for us to be able to buy in bulk from Canada,” India’s High Commissioner said.
“You have the resources the world needs, but you’re letting it lie in the ground.”
Not only should Canada’s economy be more open to large, private sector energy investments, he said, the federal government “has to also step into some of the places where it’s difficult to put up projects” such as pipelines.
After meeting with Natural Resources Minister Tim Hodgson this week, Mr. Patnaik said he expects regular discussions with the government to figure out where India can invest on the energy front and how it can better tap Canadian fuels.
The two countries are emerging from a period of icy diplomatic relations after Ottawa accused Indian officials of being part of a campaign of violence against Canadians and expelled New Delhi’s top envoy as well as other diplomats in October, 2024.
Prime Minister Mark Carney, who has set a goal of doubling non-U.S. trade over the next decade, travelled to India in March where the two governments signed an energy partnership, which included a $2.6-billion deal to supply Canadian uranium to India. But “we’re looking for more,” Mr. Patnaik said. Renewables, critical minerals, liquefied natural gas – “you name anything in the energy sector,” India wants it, he said.
Much like Ottawa wants to see more trade with India, Alberta is targeting the country as a potential market for its oil and gas as it pushes for the West Coast pipeline.
Brian Jean, Alberta’s Energy Minister, told media on the sidelines of the conference Wednesday that several proponents have approached the province about its potential pipeline, with interest in investing cash for its construction or buying oil off the conduit if and when it is built.
Mr. Jean was tight-lipped on details, but said the province has had preliminary talks with one Fortune 500 company “about financing the entire project and building the entire project.”
Alberta has set a July 1 deadline to submit its plan for the pipeline to Ottawa’s Major Projects Office. Mr. Jean said “you’ll have to wait and see” whether it meets that target.
The planned pipeline would be able to carry roughly one million barrels of oil. But “even if we had three pipelines now, with one million barrels each, we would not meet the demand of Asia,” Mr. Jean said.
Mr. Patnaik seemed optimistic that Canada can help meet his country’s future energy demands, noting that the oil sector here roughly doubled its output over the past 15 years “despite headwinds, despite a bad regulatory framework.”
Canada’s image as “a highly over-regulated jurisdiction where things take a long time” is slowly changing, he added, but the country’s past tendency toward sluggish project approvals means investors remain somewhat skeptical.
India wants to forge long-term agreements with Canada for many reasons, he said, including the scale of this country’s natural resources, its reliability as a supplier and its democratic government.
“We have the same values. We would like to do more with Canada.”
This article was first reported by The Globe and Mail
