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Friday, April 12, 2013

Shipping oil east only counts as oil security if the oil stays in Canada — and it doesn't.


Pipeline won’t solve our problems


by Gordon Laxer
For years I was a voice in the wilderness calling for an oil pipeline 
to bring western oil to Eastern Canada. Now that TransCanada and 
Enbridge each have plans to build one, I should be pleased. But I'm 
not.
Canada is in the absurd position of promising the US oil security 
through the export of oil from Alberta — while Canada itself is the 
most oil insecure country in the global North.
While Canada exports two-thirds of its oil — 99 percent of that to 
the US — Quebec and Atlantic Canada rely overwhelmingly on oil 
imports, half of that from the volatile Middle East. Unlike all other 
member countries in the International Energy Agency, Canada has 
no strategic petroleum reserves to use when the next international 
oil supply crisis strikes.
Shipping oil from Alberta 4,400 kilometres to the Atlantic is a big project, but big oil is desperate to get oil to tidewater — any tidewater — where oil prices are much higher.
Despite a short-term surge in US oil output, 

global oil production has not grown since 

2005. It is not likely to in the future either, 

for reasons that Jeff Rubin and others have 

argued. Oil pipelines to the East, then, could finally bring Canada 

the energy security we will need. Once built, and if dedicated to 

serving Canadians first, they could catapult Canada from the most 

oil insecure country to the head of the "secure" line.
Why, then, am I skeptical about TransCanada's proposal to partially 
convert its natural gas main line to an oil pipeline to Quebec and 
perhaps New Brunswick, and about Enbridge's plan to reverse its 
Montreal to Sarnia pipeline to once again bring western oil to 
Quebec?
Because right now the project is all about exports and corporate 
profits and it has nothing to do with energy or environmental 
security for eastern Canadians. Big, mainly foreign, oil and the big 
pipeline corporations seized on sending Alberta oil east, after they 
were blocked from shipping oilsands oil south through the planned 
TransCanada's Keystone XL line to Texas and west via the 
proposed Northern Gateway pipeline to the BC coast. Shipping oil 
from Alberta 4,400 kilometres to the Atlantic is a big project, but 
big oil is desperate to get oil to tidewater — any tidewater — where 
oil prices are much higher.
But whatever the motivation for building them, won't the west-to-
east oil pipelines make eastern Canadians more energy secure? Not 
necessarily. That incidental benefit could quickly be dropped if and 
when big oil decides that exports are more lucrative than supplying 
Canadians with their own oil.
The Harper government has made it clear that it will not intervene 
to provide Canadians with energy security the way all other 
countries in the International Energy Agency do.  "We don't tell the 
companies to put the pipelines here or there," Harper declared last 
year.
Instead of supplying domestic, conventional oil to eastern 
Canadians as part of a national eco-energy plan to transition 
Canada off fossil fuel, this is just another oilsands exporting ploy.  
If it succeeds, it will sink Alberta and Canada even deeper into a 
hewers-of-wood trap that is also a carbon trap.
Do we want to be an innovation-based economy or a resource-
based economy? Unfortunately, we can't be both, notes Daniel 
Trefler, a business professor at the University of Toronto.
“The creation of an affordable, environmentally friendly alternative to oil would be a great thing for the world. It could be economically devastating for Alberta if, when it happens, we are still heavily dependent on oil exports.”
As the stewards of seven percent of the 

world's land mass, with only 0.5 percent of 

the world's people, Canadians spew 2.5 

percent of the world's greenhouse gases into 

the biosphere shared in common with all 

humanity and other life forms. Do we want 

Canada to be branded even more deeply as 

the world's carbon bad boy?
The only saving grace of the proposed west-to-east lines is that the 
six refineries east of the Quebec-Ontario border have limited 
capacity to handle Alberta's heavier oil. At first, at least, most of 
the oil on the lines would be lighter, less environmentally-damaging 
crude oil. However there is no guarantee that will last.
We shouldn't expect environmentalists in the US, Norway or 
elsewhere to do all the heavy lifting in getting Alberta and Canada 
to cap and then phase out dirty oilsands oil. Canadians in every 
province should demand that their provincial governments say "no 
pasaran." "We will not allow oilsands oil to pass through our 
province."
Former trade minister David Emerson warned about the danger of 
Alberta failing to diversify its economy. His 2011 report for the 
Alberta Premier's Council for Economic Strategy said: "the creation 
of an affordable, environmentally friendly alternative to oil would 
be a great thing for the world. It could be economically devastating 
for Alberta if, when it happens, we are still heavily dependent on oil 
exports."
Unfortunately, the Alberta and Canadian governments have no 
plans to avoid that trap. Instead they deliberately mix up the 
interests of big, mainly foreign, oil corporations with those of 
Albertans and Canadians. But it is not in Albertans' interests to get 
stuck in a fossil fuel belt that will soon be seen as much of a dead 
end as the auto rust belt of Michigan and southwestern Ontario.

This article previously appeared in the Edmonton Journal.

About Gordon Laxer


Gordon Laxer is a political economy 

professor and the founding director and 

former head of Parkland Institute at the 

University of Alberta.
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