Canada loses $30 to $70 million per project every day a critical pipeline providing access to significant energy markets is delayed, a new report has found.
The report, which was commissioned by the Government of Saskatchewan and prepared by the Canada West Foundation, says a failure to address current pipeline shortfalls is putting western Canada’s oil industry at risk.
It calls on provinces to work together to open up access to markets in Asia, Eastern Canada and the US Eastern seaboard as well as for the US and Canada to cooperate in getting oil to the Gulf Coast.
“The loss to the Canadian economy will be devastating if we don’t dramatically expand our pipeline capacity to multiple markets,” Canada West Foundation CEO Dylan Jones says. “Abandoning this industry to oil producing countries with lower standards is not leadership.”
Canada West Foundation senior economist and report author Michael Holden estimates that should proposals such as Trans Mountain, Keystone XL and Northern Gateway not go ahead, the nation will lose $1.3 trillion in economic output, 7.4 million person years of employment and $281 billion in tax revenues between now and 2035.
Holden says even outside of oil-rich Alberta, these projects would add $84 billion over that period to other provinces.
Overall, the report says the economy loses $30 to $70 million per day for each stalled project that would open up access to the right markets.
It also says new pipelines offer by far the best long-term energy transport solution notwithstanding clear opportunities for rail transport and that current market conditions do not support developing additional refinancing and upgrading capacity in Western Canada.
The report comes amid ongoing tensions over the use of Canada’s tar sands and associated infrastructure.
The oil and associated pipelines are expected to generate huge economic benefits but raise environmental concerns not only about the possibility of leakage or spillage in sensitive areas but also because extraction of petroleum from tar sands generates significant greenhouse gas emissions.
The Foundation’s report applauds recent collaboration between the Premiers of Alberta and New Brunswick regarding solutions to energy market access, referring to the talks as “an example of how provinces can work together on a national issue.”
Published on 11 February 2013