When environmentalists and politicians feud the Canadian economy takes an enormous hit

By now, everybody knows how the pipeline wars in Canada erupt.

First, some ambitious pipeline company proposes transporting oil, gas or biofuels across provincial or international borders using pipelines and then the companies, the provinces, the indigenous people and the environmentalists all weigh in on who should get what share of the benefits.

But it’s not just a game anymore.

According to a chief economist with Scotiabank, all this bickering is costing the Canadian economy billions.

“Pipeline approval delays have imposed clear, demonstrable and substantial economic costs on the Canadian economy,” said bank chief economist Jean-Francois Perrault in a report Tuesday.

Delayed oil pipeline construction is causing a steep discount for Canadian crude prices that is costing the economy roughly $15.6 billion a year, according to the Scotiabank report.

The costs of the discount are increasing as delays continue for all three major proposed oil pipelines to export more oil from Western Canada, including Kinder Morgan’s Trans Mountain expansion, Enbridge’s Line 3 replacement, and TransCanada’s Keystone XL.

“The elevated discounts come with a steep economic cost and represent to a large degree a self-inflicted wound,” Perrault said.

The reports outlining the costs of all these delays come amid an intensifying spat between Alberta and British Columbia over the construction of the Trans Mountain project, pitting arguments of economic impact against the importance of protecting coastlines and limiting greenhouse gas emissions.

The potential climate change impacts from increased oilsands production should also be factored into any calculus, said Greenpeace’s Keith Stewart, in an email.

“Climate change also imposes clear, demonstrable and substantial economic costs on the Canadian economy, and those costs are only going to get worse,” Stewart said. “To safeguard our kids’ future, we should be asking how we can prosper as we move beyond oil rather than adopting the banks’ myopic focus on how to maximize the next quarter’s profit margin.”

So what should we do to appease the critics? Should we kill all pipeline projects and move into alternative fuels instead?

“Based on today’s technology and what we know about the potential for better technology, much of the world’s oil and gas will have to be left in the ground…,” David Crane of The Hill Times writes. “There are even suggestions that the KeystoneXL pipeline is in trouble due to lack of customers.”

“Many industries are being pushed to change,” Crane added. “In the automotive industry, for example, Volvo has announced it will only manufacture electric and hybrid vehicles from 2019, France and Britain have said they will halt the sale of gasoline and diesel vehicles by 2040, and China, the world’s largest auto market, is planning to require that eight per cent of all vehicles sold next year be electric, with plans to rapidly advance its competitiveness in electric vehicles.” The Hill Times report adds.

David Miller, president and Chief Executive Officer with The World Wildlife Fund, told The Globe and Mail, in a story about the future effects of climate change that the discussion shouldn’t always be about the environment versus the economy.

“I actually think it’s the other way around,” he said. “It’s: How do we build an economy that’s going to succeed in the future? And a big part of that answer is doing things in harmony with the environment.”

“So, for example, in order to use fewer fossil fuels to heat and cool buildings, one of the solutions might be energy retrofits. You create huge numbers of jobs because that’s a very manual thing to do. For example, to retrofit all of the multi-unit apartment buildings that were built in the seventies and earlier would create about 30,000 jobs. So you create far more than you would be losing by slowing down the exploitation of oil because it’s not needed as much if you’re using less. I think the challenge for government is the jobs that are created need to support the communities that aren’t creating as many jobs any more.”

Who knows what will happen as Canada and the rest of the world seem to move away from oil and gas into other forms of energy. But one thing is for certain: If the world is successful in finding alternate sources of energy, we’ll see an end to all the pipeline protests from environmentalists and at the same time, we’ll see a lot less bickering between the provinces and our international neighbour to the south.

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Jeff Wilkinson

About the Author: Jeff Wilkinson

Jeff Wilkinson  is a Senior Politics Reporter at Debate Report covering provincial and national politics, . Before joining  Debate Report, Jeff worked on several provincial campaigns including Jack Layton. Jeff has worked as a freelance journalist in Toronto, having been published by over 20 outlets including CBC, the Center for Media and VICE.com.

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