CALGARY – A report commissioned by one of the most vocal opponents of the proposed Northern Gateway oil pipeline questions the economic case behind the project, which would connect oilsands crude to Asian markets via Canada’s West Coast.
There’s ample pipeline capacity to handle oilsands production growth of 50 to 100 per cent over 2010 levels by 2025, said the report, which ForestEthics plans to submit to the regulatory panel weighing the $5.5-billion proposal.
It said Northern Gateway’s backer, Enbridge Inc. (TSX:ENB), is basing its assumptions on an “unreasonable” oilsands production growth rate – a more than tripling in output by 2035 over 2010 levels.
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“An analysis of current Canadian oil consumption, imports, exports, production,and remaining reserves reveals that an exponential growth in oilsands production and exports will compromise the long-term energy security interests of Canadians, as well as their environmental interests, given the physical footprint of such expanded oilsands operations and their atmospheric emissions,” the report said.
It said there’s enough U.S. demand for Canadian energy exports, and that Canada ought to keep some of the resource for itself instead of sending the raw product overseas.
The report was authored by David Hughes, a former scientist with the Geological Survey of Canada.
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Last week, researchers with the University of Calgary released a study with a much different point of view – that expanding pipeline capacity to international markets should be a national priority and that lack of such access puts Canadian producers at a big disadvantage.
That report said allowing Canadian crude to access Asian markets via projects like Northern Gateway would help Canadian producers garner nearly $14 more for each barrel of oil they produce by 2030 – a figure with which the ForestEthics report disagrees.
The University of Calgary report said improved market access could add $131 billion to Canada’s gross domestic product between 2016 and 2030 and contribute $27 billion more in federal, provincial and municipal taxes.
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