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Broad cooperation required to address critical lack of energy pipeline capacity

07-Feb-2013

New report identifies Canadian economy at risk if pipeline projects delayed

CALGARY – The Canada West Foundation is urging provinces to take collaborative action in addressing a critical lack of Canadian pipeline access to major energy markets. Research from the Foundation’s newly released report, Pipe or Perish: Saving an Oil Industry at Risk, reveals significant economic losses to the Canadian economy – between $30 and $70 million per day for each stalled pipeline project that would open up access to the right markets.

“The loss to the Canadian economy will be devastating if we don’t dramatically expand our pipeline capacity to multiple markets,” says Canada West Foundation CEO Dylan Jones. “Abandoning this industry to oil producing countries with lower standards is not leadership.”

Commissioned by the Government of Saskatchewan, the independently researched report concludes that failure to address current pipeline shortfalls is putting western Canada’s oil industry at risk and will have a substantial negative impact on the Canadian economy. The economic benefits will be lost if provinces don’t work together to open up access to markets in Asia, Eastern Canada and the U.S. Eastern Seaboard while cooperation between Canada and the US is key to getting oil to the Gulf Coast.

“If pipeline project proposals such as Trans Mountain, Keystone XL and Northern Gateway don’t move forward, Canada will be foregoing $1.3 trillion in economic output, 7.4 million person-years of employment and $281 billion in tax revenue between now and 2035,” says Michael Holden, Senior Economist at the Canada West Foundation and author of the report.

While many of the economic benefits would accrue in Alberta, Holden says the Trans Mountain, Keystone XL and Northern Gateway projects combined would add $84 billion to the economies outside Alberta.

In addition to the need to open up pipeline access to new markets, the report also finds:

• There are clear opportunities for rail transport, but building new pipelines is the best long-term transportation solution;

• Current market conditions do not support developing additional refining and upgrading capacity in western Canada.

The report’s release comes on the heels of recent talks between the Alberta and New Brunswick premiers on pursuing solutions for energy market access. “The collaboration between Alberta Premier Alison Redford and New Brunswick Premier David Alward is an example of how provinces can work together on this national issue,” says Jones. "The leadership of Saskatchewan Premier Brad Wall in working with US Governors has also been vital to Canada's national interest."

Pipe or Perish was created to provide Canadian policy-makers with the data for informed discussion about how we can mobilize planned pipeline projects and ensure that the oil industry can reach its potential production levels. View Pipe or Perish: Saving an Oil Industry at Risk.

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Canada West Foundation is the only think tank dedicated to being the objective, non-partisan voice for issues of vital concern to Western Canadians. For over 40 years, through its research and commentary, the Foundation has contributed to better government decisions and a stronger Canadian economy.

To arrange an interview, please contact:
Rachael Strathern
Communications Team Lead
403-700-9535 communication@cwf.ca 


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