Now that the Keystone Pipeline project has been effectively delayed, attention has turned to the Northern Gateway oil pipeline. This project is proposed by the Canadian company Enbridge, and would transport 525,000 barrels of oil a day from the Alberta oil sands to the West Coast, to be shipped mostly to China.
It is not a huge surprise that there are many who are opposed to this proposal, citing various environmental risks.
Both Enbridge and Prime Minister Stephen Harper have adopted the rhetoric of nationalism, and have attacked various Canadian environmental non-governmental organizations (NGOs), that oppose the pipeline, for accepting American funding.
Stephen Harper has on several occasions expressed his concern that American influence will muddle with Canadian interests.
As he said in an interview with Peter Mansbridge, “Certain people in the United States would like to see Canada be one giant national park.”
Though as Mansbridge pointed out, this is something of a double standard considering the billions of dollars Chinese investors have pumped into Alberta’s oil business.
The project is currently under review, and there have been several protests organized, including one by the people of Hartely Bay First Nation, in which more than 600 people took part.
Considering the fact that the future of the project is far from certain, the question becomes, “Would this be good for the Canadian people?”
The debate over this pipeline has become polarized, as demonstrated by people on one side calling this project a nation-builder, while the other side simultaneously calls it the construction of the next Exxon Valdez oil spill.
Due to the fact that the benefits versus the costs of this project are as clear as mud (or as clear as oil), here are some of the cold hard truths of the project:
On the one hand, Enbridge is saying this $5.5 billion project will create 3,000 construction jobs, 1,550 pipeline maintenance jobs, 560 other long-term positions and 270 billion dollars in economic profit.
As Paul Stanway, Enbridge’s communication spokesperson said, “You can buy a lot of hospitals and schools with that kind of money.”
On the other hand, there are the environmental concerns that include: the potential of a large oil spill; the risk of small oil spills, which according to a study conducted in Alberta is about two per every 1,609 kilometre stretch of pipeline; the acidity of bitumen, which is higher than typical crude oil, causing greater erosion of the pipeline; the fact that the pipeline passes through sensitive ecosystems such as the Great Bear temperate forest; and of course, that pesky little problem of global warming.
The concerns over the proposed pipeline are, however, not limited to environmental risks, and also include economic repercussions.
According to an economic assessment done by Robyn Allan, former CEO of Insurance Corporation of British Columbia, opening up the Canadian oil industry to global markets would cause, “inflationary price shock which will have a negative and prolonged impact on the Canadian economy by reducing output, employment, labour income and government revenues.”
Allan points out that Enbridge does not account for this impact when putting forth its revenue figures.
In addition, the construction of the Northern Gateway pipeline also has a high opportunity cost.
By further opening the Canadian oil economy, it reduces the affordability of refining our own oil. Synthetic (refined) oil sells for approximately $90 a barrel compared to crude’s $60. This pipeline would be pumping out 525,000 barrels a day, which translates into a daily loss of $15,750,000 dollars a day.
Not to mention Canada imports more than half of the crude oil we need from places such as Venezuela, Algeria and the Middle East, despite having the second largest oil reserves in the world.
It seems to me that this proposed pipeline simply proves that oil can still grease the hands of politicians.
When one takes into account the environmental and economic risks of this pipeline, it’s fairly clear that it outweighs the financial gain.
Enbridge and governments collecting royalties will benefit, while First Nations and others living in close proximity to the pipeline pay the greatest costs.
Luke Hildebrand is a second year student studying politics and economics. He grew up in Kenora and Winkler, and moved to Winnipeg last year.
Published in Volume 66, Number 21 of The Uniter (March 1, 2012)