Northern Gateway pipeline would inject billions into economy: Study (Fraser institute)

FORT MCMURRAY, ALTA. - Sending Canadian oil to Asia via the proposed Northern Gateway pipeline will funnel billions of dollars into the national economy and create thousands of jobs, concludes a new study from the Fraser Institute, a Canadian right-libertarian think-tank.

The study, titled Ensuring Canadian Access to Oil Markets in the Asia-Pacific Region and released Tuesday, also argued First Nations communities, who are largely opposed to the proposed $5.5 billion pipeline, would economically benefit from the project.

“The Alberta oilsands present Canadians with a unique nation-building opportunity. As both a country and as individuals, we already have a substantial investment in the oilsands,” said Gerry Angevine, a senior economist with the Fraser Institute and co-author of the report. “We take greater advantage of this resource if we can reduce our reliance on the United States and open new markets for Canadian oil in the Asia-Pacific.”

Angevine said Canada would add $10.5 billion to its GDP with the construction of the Northern Gateway project. Operations would bring at least 1,150 long-term jobs and funnel $9 billion per year to the country’s GDP.

The majority of construction-related jobs would occur in Alberta and British Columbia.

Ontario and Quebec’s struggling manufacturing sector could benefit from supplying steel, equipment and other supplies to the project, the report said.

Angevine also argued Canadian pension plans, which are heavily invested in the oilsands, would see greater financial returns and producers could sell Canadian oil for higher prices to Asian countries. For instance, the report points to the $1.8 billion investment the Canada Pension Plan has in the region, plus a $1 billion oilsands investment made by the Ontario Teachers’ Pension Plan.

“Shipping Canadian oil to Asia-Pacific nations will boost the returns for the Canada Pension Plan and could improve investment income for virtually every Canadian collecting a pension,” Angevine said.

Instability in traditional oil producing countries has prompted major Asian energy importers to look for alternative oil supplies to fuel the demands of a growing middle class and manufacturing sector. Canada has spent the last decade attempting to woo Asian markets with Alberta’s vast oil reserves in an attempt to turn oil-thirsty Asian superpowers with deep pockets — particularly China, Japan and Korea — into a frequent customer.

Calgary-based energy company Enbridge has been seeking approval to build the 1,177 km Northern Gateway pipeline, which would connect northern Alberta’s landlocked oil to Asian-bound tankers on the Pacific coast.

The only hurdle standing in the way is fierce opposition. Environmentalists and residents fear a pipeline spill would be an environmental disaster. Several legal challenges from various First Nations communities have also halted construction of the pipeline.

Mike Hudema of Greenpeace Canada argues any economic benefits from the Northern Gateway project are not worth the environmental risks.

“We’re talking about hundreds of oil tankers, some as long as the Empire State Building, transporting oil in an extremely sensitive area,” Hudema said. “And Enbridge wants to build this pipeline, which would cut through hundreds of streams and a rainforest and the Rocky Mountains. But their history shows they have an atrocious safety record.”

Hudema also argued many jobs surrounding construction of Northern Gateway are short-term, temporary contract jobs, and would only bring temporary benefits to the region.

If Ottawa grants Enbridge permission to proceed with construction of the proposed $5.5-billion project, the company hopes to begin operations by 2015.

Original Article
Source: toronto sun
Author: Vincent McDermott