Author: Northern Gateway
Dated: 11 April 2012
A workers association says Alberta NDP policy of opposing Northern Gateway because it will transport bitumen is a recipe to kill jobs and prosperity.
The Alberta Merit Contractors Association calls on the NDP to support both Gateway and Keystone XL, which proposes to transport Alberta oil to the U.S. Gulf Coast, as a way to boost viability of the oil sands – a big contributor to the provincial economy.
“Thousands of construction and energy industry jobs are currently tied to recovering bitumen. The NDP plan could result in these valuable resources being shut-in and would result in lost opportunities and jobs for Albertans," says Stephen Kushner, president of the Association that represents over 1,300 contractor firms employing over 40,000 workers in commercial, institutional and industrial construction sectors.
The NDP has said it is in favour of the pipelines, but only if they are exporting upgraded bitumen. What’s lost on the NDP is that Northern Gateway will be constructed so that it can carry both diluted bitumen and upgraded product.
The Association says it is a supporter of the “Refine it Where We Mine it” coalition dedicated to adding value to Alberta's energy resource chain by boosting oil sands crude oil refining capacity in the province.
The NDP’s policy of exporting only refined product is not achievable, says Kushner. And if Gateway and Keystone aren’t built, Albertans would be forced to “give up” tremendous benefits.
"Prevailing markets and economics are saying that fully realizing the goal of refining all of our resource products must be phased in over time.” Kushner stated in a recent news release. “The NDP's stand against moving forward on the pipeline projects, as soon as possible, means they want Albertans to give up tremendous opportunities that exist today. Their plan is merely a wishful hope that uncertain global conditions in the distant future will provide suitable economic conditions to attract the multi-billions of dollars of private investment needed to build each upgrader or refinery."
If you’ve been following the oil refining debate, as we have, you’d know that upgraders and refineries are running at, or near, peak capacity in Alberta.
Currently, oil exported from Canada is sold at a significant discount to the global price. Analysis by Scotiabank released March 28, 2012, as reported here, found that discount to be over $30 per barrel. That’s a lot of money left on the table for Canadian producers, their employees and investors, as well as for government programs funded in part by revenue generated through royalties and corporate taxes.
“Canada needs to increase export capability by building more pipeline capacity,” said Patricia Mohr, a Scotiabank analyst, in her monthly commodities index report. “Secondly, we need to diversify away from just the U.S. Midwest market [and] the third thing, which I'm beginning to be a little concerned about, is that the growth of U.S. petroleum demand is extremely slow. Last year it actually declined.”
It’s clear that Canada needs to open new markets for its oil exports in order to achieve maximum value. It’s also clear that Northern Gateway is an important step towards this goal.
One thing to remember that an argument in favour of boosting refining capacity in Alberta is NOT an argument against Northern Gateway, despite the proclamations by the NDP.
Northern Gateway will be able to ship both.