Oil squeeze a big concern

Cushing Tank Farm Blog
JanetHolder
Author: Janet Holder - Executive vice President Western Access
Dated: 9 February 2012

I’ve said it before and I’ll say it again … I think Northern Gateway is one of, if not THE most important proposed infrastructure projects in Canada today.

That belief was bolstered again when I read in the Globe and Mail about something that serves to underscore what I’ve been saying for some time – Canadian oil producers need another outlet for their oil.

Oil prices for Canadian producers are getting “squeezed” and that’s not a good thing.

It’s not good for energy producers, for the thousands who work in the industry, for communities, for provinces and for the federal government. All of us rely to varying degrees on the viability of our energy sector.

Whether or not the current squeeze is temporary is a matter of debate, but it does underline something very worrisome.

What’s happening? Canada produces a lot of oil. We are also a net-exporter of oil valued at about $50 billion a year.

It has become our most valuable resource and a pillar of our national economy – but there is one catch, virtually all of the oil we export goes to just one market, the U.S.

America is a mature market and demand there isn’t what it once was. Combine that with soaring U.S. oil production, and you get the picture. It’s a potentially dangerous imbalance for Canada.

“On a logistical basis, it points to the vulnerability of having all our eggs in one basket as a nation. It makes more sense to diversify your customer base for crude oil,” Frank King, an analyst with First Energy Capital, says in the Globe.

This imbalance could also see us leave a lot of money on the table. By one estimate, it will cost the energy industry $8 billion a year if Northern Gateway isn’t built. It is already depriving governments of millions in lost royalties and tax revenues every single day.

Northern Gateway would give our energy industry other crucial trade outlets. Booming economies in Asia promise to give Canadians more competitive returns for our resource and shelter us from the vagaries of having a single oil export market.

An Enbridge-commissioned report (which was required of us as part of our regulatory application for Northern Gateway) estimates that this one project would boost Canadian GDP by $270 billion in the first 30 years of operation.

That’s tremendous wealth that would flow through our economy, create jobs and result in higher tax revenues that pay for hospitals, roads, schools – all the things that help make Canada the country it is.

I’m a proud British Columbian and a patriotic Canadian.

And the situation described in the Globe concerns me greatly.

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Comments
  • George Martin, Jul 09th, 2012 (2 years ago)

    This project is not job creation; its job export the same as raw logs. You create jobs by processing the raw material not exporting it.

  • Daniel, Jul 05th, 2012 (2 years ago)

    Some of the comments being made on these blogs are strange. Why do some people think it is the responsibility of a corporation like Enbridge to build a green economy? Demand is what drives economies. If there's enough demand for alternative energy, businesses step in to fill the demand.

    "I drive a gas burning car because there's no alternatives, governments need to make alternatives" good grief. There are alternatives. You can walk, ride a bike or take transit. No one is forcing a gun to your head to drive anywhere. Change your behavior before demanding government or corporations adapt to your utopian vision of what life should be like.

    We're a busy society. Tradeoffs have to be made. I want to have time with my family while still being able to provide for the things we need like a house and food and hopefully a good education for my two kids. Oil and gas enable all of those things for me. A solar panel or windmill won't provide the fuel needed to transport goods from the places they're produced to my house.

    To be perfectly honest, when I read some of the commentary around the oil industry on websites like this and on newspapers too I'm deeply disturbed by my fellow Canadians inability to accept reality and see the forest from the trees. Common sense apparently isn't that common anymore.

  • Northern Gateway, Jul 05th, 2012 (2 years ago)

    Hi Vincent, thanks for your comment.

    The ads we're running are an invitation for people to find out more about the project and join in the conversation. The ads present our belief that the project offers considerable economic and social benefits to British Columbians and all Canadians and that the project can be built and operated safely.

    You, of course, are entitled to disagree with our vision. Do you have any questions about the project? Can we point you to any information you'd like to know about?

  • Northern Gateway, Jul 05th, 2012 (2 years ago)

    Hi Nathaniel, thanks for joining the conversation.

    Have you seen our video on marine & tanker safety yet? http://www.northerngateway.ca/economic-opportunity/northern-gateway-tanker-safety-video/

    The Douglas Channel is a wide and deep waterway. It's been safely used for decades by industrial marine traffic including tankers carrying petrochemicals like methanol and condensate for over 25 years.

    Northern Gateway's proposed marine safety plan will enhance safety for all vessels transiting these waterways. The introduction of tethered towing of tankers by tugboats has proven to greatly reduce the risks you've identified in tanker ports around the world, including in Alaska. Protecting the environment is our top priority.

  • Nathaniel Epp, Jul 05th, 2012 (2 years ago)

    I grew up in Prince Rupert, BC, very close to where the proposed pipeline would go. I worked on fishing boats and have seen ships that are much smaller than the tankers that would transport the oil, hit sand bars and rocks in the inner passages that the oil tankers would have to travel through. An oil tanker having a mishap like this and potentially spilling it's cargo seems almost inevitable if the pipeline project were to go through. This bothers me because one accident like this and we could lose habitats, eco-systems, species, and our pristine coast, worth far more, to many people, than what this project will ever provide to so few.

  • vincent gorman, Jul 04th, 2012 (2 years ago)

    i am sick of this being shoved down my throat. this is a losing situation unless we in BC tax and or levee the hell out of this company. otherwise, we are assuming all the environmental risks for them. i hate those commercials that show a beautiful, peaceful world. it makes me think, that they think we are ALL stupid. i saw a Simpsons episode that did the same thing with a national park. give me a break!

  • Mairlyn Craig, Jun 09th, 2012 (2 years ago)

    There needs to be more done to protect the environment. Another spill in Alberta does not speek well of pipelines and the distructiion left behind nor the pictures of the distructed landscape of Fort McMurray. Rushing this through on the Scare tactics of jobs and the Economy is wrong. We need to change course and build the economy on developing green alternatives. Yes I drive a oil supplied vehicle but I would gladly change to a greener option but our government does not support the necessary developements for ordianary citizens to access the technology.

  • Mary in Victoria, May 31st, 2012 (2 years ago)

    I'm a British Columbian, born and raised. I also live on an island and drive a car to work and to do the things I need to do to support my family. I use oil in other words. My furnace runs on oil 7 or 8 months of the year.

    Tankers sail past my city every day. They've been safely doing so for many years. Tankers bring the gas and oil to the island I live on. I don't think there has ever been a spill. Could it happen? Anything can happen I guess, but that it hasn't happened yet is a testament to the safety record of the companies who deliver and transport our fuel.

    I'm really irritated by the small number of British Columbians who claim that we alone face all of the risk of the Enbridge pipeline. After looking at the route map, there's quite a lot of pipe in Alberta too. Seems to me the risk/reward balance could use some improvement, but my husband reminded me the other day that our education and healthcare system receives considerable tax money from the federal government which takes a large share of the taxes from the oil and gas industry. We're starting to plan our retirement and I know that my government pension plans are heavily invested in Canada's oil and gas industry, which is one of the reasons why I'll have a good pension to retire on.

    To me, suggesting we should all move to wind and solar smacks of naivety. How is my car going to run on wind or solar? Where I live, we have months of rain in the winter time and it's not particularly windy anyway. I can only imagine the protests that would happen on the legislature lawn if Enbridge proposed to build a windfarm anywhere near Victoria. People here are very protective of their views.

    I don't know what the answers are, but blocking development doesn't seem to be a realistic one. I say, if you're going to build it, make sure it's safely done. I take comfort in the long history of safe oil and gas transport in BC.

  • Ria, May 30th, 2012 (2 years ago)

    I, like many British Columbians, do NOT want the Northern Gateway pipeline built. There are many reasons, the most important being a danger to the environment and our coastline and its wildlife. You cannot guarantee that there never will be an oil spill, it is impossible and therefor we will not accept that risk. You claim that it will be good for the national economy. As I see it, it will only be good for Alberta and the federal gov't. BC will receive very little out of this once the pipeline has been built but we carry all the risk.
    My suggestion is two-fold: pipe the oil to Ontario and refine it there for national use. China already is slowing down and the demand won't be there by the time the pipeline has been built. The Chinese would like to be involved in the building of the pipeline. That is a huge concern because of their record of shoddy practices with little care for humans and the environment.
    Secondly, use the oil for the energy needed to develop new and green energy sources. That at least will leave a great legacy for our kids.
    PM Harper is making many Canadians extremely angry by trying to bulldoze this pipeline through. You may not know the resistance that awaits you in BC but I promise it will be formidable.

  • Northern Gateway, Feb 14th, 2012 (2 years ago)

    Hi Randy, thanks for your comment and suggestion.

    Ultimately, it’s up to the regulators to make decisions with regards to incident penalties.

    No spill is acceptable to Enbridge because our goal is zero incidents. Our number one priority is the safety and integrity of our operations and to prevent all spills, leaks and releases. Since 2002, we have spent approximately $1 billion on our safety and maintenance programs for our Liquids Pipelines systems across North America.

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