(The Canadian Press files.)

Lack of pipelines costing Canada billions: study

A new report by the Fraser Institute suggests Canada could miss out on $15.8 billion this year

Canada is losing out on $16 billion in potential revenue because of a shortage of oil pipelines, according to the latest study by the Fraser Institute think tank.

The study, released Tuesday, highlights how much money the country is losing through several “costly constraints” that have led to overdependence on the U.S., as well as reliance on more costly modes of energy transportation, such as rail.

“Insufficient transportation infrastructure and pipeline bottlenecks” have led to a dramatic drop in the market price of Canadian crude oil compared to other oil prices, the report said.

The difference in price between Western Canada Select and West Texas Intermediate averaged US$26.30 per barrel in 2018.

If this continues beyond the year’s first quarter, the report said, national energy firms could miss out on $15.8 billion in revenue, or about 0.7 per cent of Canada’s national GDP. That’s compared to a loss of $20.7 billion in foregone revenue between 2013 and 2017.

“Canada’s steep oil price discount is a result of insufficient pipeline capacity, which has dramatically lowered the market price for Canadian crude oil and resulted in lost revenue for oil producers as well as the economy,” the report says.

Trans Mountain key to Asian markets: study

Nearly 99 per cent of Canadian heavy crude oil is currently exported to the U.S., the study said, so expanding the B.C.-to-Alberta Trans Mountain pipeline would help gain access to Asian markets.

Building the Keystone XL and the Line 3 Replacement pipelines, it added, would expand capacity to the U.S. to combat a growing energy sector south of the border.

Canada doesn’t have the inventory to sell oil overseas because of delays and political opposition to several pipelines, the report said, and energy companies are forced to sell barrels to the U.S. at lower prices.

“Canada requires new pipeline infrastructure to transport heavy crude production from Western Canada to Gulf Coast refining hubs and overseas markets,” the report says.

B.C., feds continue court battle

Exactly which level of government has jurisdiction over the trans-provincial pipeline is currently before the courts.

The B.C. government has applied to court to see if it can impose new environmental permits on the pipeline project.

Prime Minister Justin Trudeau has vowed the pipeline will be built, and federal Finance Minister Bill Morneau is working on a plan with Kinder Morgan to ease investors’ worries.

B.C. Premier John Horgan, meanwhile, has said he will use every tool available to stop the pipeline, which he says could have environmental and economic repercussions in the case of the spill.


@ashwadhwani
ashley.wadhwani@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Cost of Pipeline Constraints in Canada: Fraser Institute by Ashley Wadhwani on Scribd

Just Posted

Nanaimo’s Lego community creating, co-operating

Mid Island Lego Users Group is always looking for creative new members

Nanaimo mayor says new tent city is ‘a good option’ for now

Municipality to provide toilets, garbage collection and police patrols at downtown homeless camp

Nanaimo Ladysmith Public Schools plans to expand focus school program

If someone asked a class of Fairview Community School students about reading… Continue reading

UPDATE: Nanaimo city hall dealing with leaked report

Privacy commissioner notified after release of confidential report on purchase card use

LETTERS TO THE EDITOR: Fire hall process flawed

We cannot find anyone who knew about a vote for the borrowing of $17 million for a fire hall

VIDEO: Nanaimo celebrates heritage with parade, festival

Nanaimo Heritage Festival includes parade downtown and music and activities at park

Biologists keep an eye out for Nanaimo’s next generation of turtles

Cameras at Buttertubs Marsh help monitor populations of western painted turtle, a species-at-risk

NRE will present business plan to the public this month

Nanaimo Recycling Exchange plans public engagement sessions for May 26 and May 30

Couple survives being buried in mudslide on B.C. highway

The couple, from Saskatchewan, were en route to Nelson when a tree fell in their path

LETTER TO THE EDITOR: The less oil that flows through B.C., the better

A catastrophic oil spill on our coast could never be cleaned up to any extent, says letter writer

Artificial turf field officially dedicated in Nanaimo

City and school district dedicate $3.6-million NDSS Community Field

Nanaimo Astronomy Society lecture will lament light pollution

Lindsay Malbon, Bill Weller and Mitchell and Andrew Gair guest speakers at May 24 meeting

Man helps pull unconscious surfer from water near Tofino

Good Samaritan says lifeguards are needed at Long Beach and along the Pacific Rim park

PHOTOS: Floodwaters rise and fall in Grand Forks

The flood-ravaged Kootenay-Boundary region begins to heal

Most Read