Fraser Forum

More pipeline obstructionism from British Columbia

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Pipeline obstructionism continues to hamper Canada’s ability to deliver its oil and natural gas to the world’s more lucrative foreign markets in Asia and Europe. The latest eruption of obstructionism is brought to us by Gregor Robertson (pictured above), the mayor of Vancouver. Speaking to a ministerial panel, Robertson brought up the usual arguments against the Trans Mountain expansion—that the risk is too high, that the NEB failed to gain the public’s trust in its review process, that the project does not have the (seemingly non-existent) social license to proceed, and so on.

This eruption of pipeline obstructionism comes on the heels of the release of an internal memo the Canadian deputy minister of finance implying that no new pipelines would be needed until 2025.

In point of fact, both are wrong. First, as we have noted in the past, oil transport by pipeline and tankers has grown safer even as oil quantities moves have grown. As we noted after publishing a study on the safety of oil transport by tankers:

Let’s look at global tanker safety trends. In the 1970s, there were on average 24.5 large spills (more than 700 tonnes) per year around the world. This declined to an average of two large spills per year in the first four years of the 2010s.

The trend for medium sized spills (7-700 tonnes) also declined significantly, from an average of 54.3 spills per year across the globe in the 1970s to an average of five per year during the first part of the 2010s. In addition, of all the oil spilled at sea from 1970 to 2009, 56.0 per cent was spilled in the 1970s, 20.5 per cent in the 1980s, 19.8 per cent 1990s, and only 3.7 per cent in the 2000s.

These reductions in accidents and the amount of oil spilled each year have come when the amount of oil being shipped by sea has been increasing. In 1970, 1,207 million tonnes of loaded crude oil was transported by sea. This number has increased to an estimated 1,710 million tonnes of loaded crude oil in 2014.

And as we’ve noted repeatedly, oil that won’t move by pipelines will likely move by rail, increasing—not decreasing—risk to people and the environment. While both pipelines and trains move the overwhelming majority of products uneventfully (better than 99.99 per cent of oil moved by either mode arrives at its destination without incident), pipeline has a slight edge that adds up as quantities scale. Moving a given quantity of oil by rail, is 4.5 times more likely to result in an occurrence (incident or accident) than moving that same oil by pipeline.

And as for “not needing pipelines until 2025,” the finance minister should think again. As Gerry Angevine, senior fellow with the Fraser Institute noted recently:

In June of this year the Canadian Association of Petroleum Producers (CAPP) released its most recent long-term outlook. Although the new forecast indicates that Western Canadian oil production in 2025 will be about 400,000 barrels per day less than the previous (2015) forecast, production is nonetheless projected to increase by more than 19 per cent (700,000 barrels per day) from the 2015 rate. Further, Western Canadian oil supplies available to pipelines from both production facilities and upgraders are anticipated to increase by 900,000 barrels per day during this period.

Pipeline obstructionism costs Canadians billions of dollars in lost profits, and the royalties and revenues those profits generate. Adding insult to injury, it also leads to increased risks to humans and the environment.