Jobs, Economy and Northern Gateway

Photo above: Matt Babicki and Edson Ng,  G4 Insights Inc.

The National Energy Board’s Joint Review Panel (JRP) has now released its final report approving the Enbridge Northern Gateway pipeline project. The project would see 525,000 barrels of the heavy oil diluted bitumen (dilbit) transported across British Columbia each day and loaded onto super tankers for shipment to international refineries. The project is yet another manifestation of a pattern of digging up Canada’s raw resources and shipping them to other countries with no value-added manufacturing or refining done locally. Yet what makes this proposal particularly problematic is the significant economic and environmental risk that we in B.C. face, should a spill occur.

If you look at the numbers, B.C. is projected to receive roughly $1.2 billion in tax revenue from the Northern Gateway pipeline over the span of 30 years—that’s only $40 million a year towards a $44 billion provincial budget. Yet, according to the UBC Fisheries Economic Research Unit, the economic cost of a single major tanker spill is estimates to be between $2.4 and $9.5 billion—that’s between 2 and 8 times more than the total 30-year economic benefit of the pipeline—in one spill.

Meanwhile, to date no oil spill response study has been able to account for dilbit; studies have only analyzed what would happen in the case of a spill from more commonly shipped crude oil. Unfortunately dibit is unlike other crude oils in that whereas most oils will float on the surface, up to 50% of dilbit will sink. Once that happens, we don’t know where it will go, how it will interact with currents and tides or how we could reasonably clean it up. In some areas it is projected that only 3% of floating crude oil could be cleaned up in the event of a spill. That number is already dismally low. With dilbit it would be even lower. According to the Department of Fisheries and Oceans’ own recent submission to Treasury Board: “Behaviour models specific to dilbit spills do not exist, and existing commercial models for conventional oil do not allow parameter specific modifications.”

Yet, we have an opportunity now to shift away from our old economic model of selling our raw resources solely for short-term profit and instead position ourselves for the long-term.

Let me offer two examples.

If we are going to develop the tar sands, and if we must transport oil along our coast, then at the very least let’s refine it first. This would offer two benefits: First, it would offer greater economic benefit for all British Columbians, as we would benefit from a value-added refining and spin-off petrochemical industry instead of shipping those jobs to Asia. Second, it would significantly decrease the environmental impact of a marine-based oil spill, as refined oil products (such as gasoline, diesel, or jet fuel) are much easier to clean up than dilbit. Let me be clear, this on its own is not an ideal solution and it does not protect us from the ecological consequences of a marine-based oil spill, but it certainly mitigates the risk when compared to shipping dilbit.

However, building a future economy based solely on the exploitation of a depleting resource will not steer us towards the low-carbon pathway that so many other nations are choosing to follow. That’s why British Columbia should seize the opportunity of promoting the expansion of our clean technology (cleantech) industry. With our abundance of renewable natural resources, our highly educated workforce, our-business friendly tax structure and our reputation for innovation, British Columbia is uniquely positioned to become a leader in this sector—a sector that focuses on the production, storage, transmission and end-use of renewable energy. Just yesterday I toured Burnaby-based G4 Insights Inc’s portable thermochemical facility designed to produce compressed natural gas for vehicular transport from wood waste. We need to grow our nascent cleantech companies, like G4 Insights, rather than allow them to be scooped up and exported to the US. The cleantech sector offers long-term, high-paying and local jobs. Yet developing this industry to its full potential requires the market to be sent a strong signal from government that this is the direction we want to head.

Today’s JRP’s decision is simply a recommendation to the Federal Government. Ultimately it will be Prime Minister Stephen Harper and his cabinet who decide if the Northern Gateway pipeline project is approved. My challenge to both our Federal and Provincial governments is this: Let’s keep dilbit out of our coastal waters, keep the jobs in Canada, and position ourselves for tomorrow by building Canada’s capacity for cleantech.