To the editor:
Making the case for the Trans Mountain Kinder Morgan pipeline (Capital News, June 8) Stephen Fuhr says the pipeline is “necessary” for Canada’s economic growth, for jobs, and for government revenue to pay for programs and services.
In fact, it’s not. Oil extraction makes up less than three per cent of Canada’s GDP. Relative to the activity that generates the other 97 per cent, that’s peanuts.
As for jobs, oil and gas workers account for only two per cent of the national workforce, according to a report released last month, and the majority of those jobs involve temporary construction work.
As for government revenue, last year a total of $4.1 billion in royalty revenues was paid by Canadian oil producers to various provinces. In this period, only $1.4 billion of Albertan revenue derived from bitumen royalties. $40.9 billion came from other activities.
Given the small role oil actually plays in the economic life of the country, does the federal government have the right priorities as it commits $15 to $20 billion of taxpayer dollars, according to economist Robyn Allan, for the purchase and twinning of an oil pipeline from the tar sands of Alberta to the coastal waters of BC – setting up untold difficulties with First Nations all along the way, increasing the environmental risk of spills, and destroying any chance that the country will meet its GHG emissions reduction targets agreed in Paris?
In weighing an answer, we need also consider government subsidies that are provided to the oil and gas industry, estimated to be $3.3 billion per year.
The costs of fossil fuel production and exploitation further inflate when we consider externalities – the “hidden” costs to workers, the public, society and future generations involving health, safety and the environment.
The cost of mines clean-up, estimated at $23 billion in 2016, is a significant external cost.
The cost of climate change is another. In 2011 a government-funded think tank reported the cost of climate change for Canada could start at roughly $5 billion a year in 2020 and increase to between $21 billion and $43 billion a year by 2050.
We need also consider market conditions. Not only is the price per barrel of oil half what it used to be, China appears to no longer have any interest in purchasing low-grade Canadian bitumen, not least because of the advent of Very Large Crude Carriers that have cut transportation costs.
The carriers comfortably run out of southern U.S. ports, but are too large to run out of the terminus at Burnaby. Bitumen was never a competitive product without the market discounting it, and it’s just become less so.
Any argument about “necessity” should actually be about the need to get out of the tar sands business as soon as possible. It’s a sunset industry, everyone keeps saying – there’s no future in it.
Iron & Earth is an Alberta-based, worker-led organization that advocates for building a renewable energy economy and retrains already displaced oil and gas workers to function within it. Like them, the federal government should be looking for an exit strategy that will protect Canadian workers, rather than purchasing an economically and environmentally risky pipeline that divides provinces, political parties, and ordinary people across their dinner tables.