This article is in response to the news report today as Redford, Alberta’s Premier today rebuffed BC’s demands for a bigger return on oil revenues if BC is going to take the risk of an environmental disaster. This got me thinking about what is the price we as BC residents are willing to accept if we are to take the risk on our our soil.
More specifically what is the real price of taking Oil from the Tar Sands and shipping it to Asia? I guess that would depend on who you talk to. If you talk to an environmentalist, there is an applied absolute value (an infinite cost). If you were to ask an Enbridge executive they would offer an answer like, “the project’s construction spending of $5.5 billion over three years” (Robyn Allan).
What is the real cost? I don’t want to take a hard line on Alberta’s oil sands, but I do want open communications as to what is really at stake and how we should be distributing our resources to make a better tomorrow. When I say tomorrow, I don’t physically mean Thursday, I am talking about a world in which my elementary school kids are in their 60’s and looking at retiring.
Getting back to the Norther Gateway Pipeline. What is at stake? Is it really our environment? It does not take a rocket scientist to understand that we need to make the transition to renewable fuels, but how do we do that? Well we need a strong economy and a supportive government that can afford to push through the initial growing pains of getting the industry off the ground until it becomes the more cost effective of the two solutions. Is that going to happen if our government is backing a pipeline well lets take a look.
According to a Canadian Government Economic Report (National Energy Board Review Panel, 2012), Embridge claims that by building this pipeline it will see a $2-$3/barrel increase in its return every year for the next 30 years. But according to that same economic report the pipeline is not the bottle neck on production so there is no real increase in production capacity. This means, other than the jobs created for the 3 years in the pipelines construction, there are going to be no more real jobs created. So what benefit is this going to have on Canadians?
Well this is another simple economic tutorial. If a company is getting more for shipping a resource out of the country it will lower the domestic supply and when you decrease supply the point at which supply and demand intersect goes up driving local domestic prices up.
So what is happening is that Enbridge is making more money from oversees trade and more money domestically and they do not need to employ any more people than what is currently being projected. This is public misrepresentation on a scale we as Canadians have never seen before and this position is being backed by our Prime Minister Stephen Harper, leader of the Reform Party of Canada. After bill 78, I can not even call them conservatives any more. It is simply disgraceful, undemocratic and it is no longer the the form of government we as Canadians grew up with.
There is a lot more to this story so stay tuned. If you are interested in looking beyond the economics of the Northern Gateway Pipeline look no further than the potential environmental disaster that can be the west coast of Canada
Robyn Allan. 2012. An Economic Assessment of Northern Gateway. Submitted to the National Energy Board Joint Review Panel as evidence