Study says lack of pipeline capacity costing Canada billions in lost revenue

Few issues have been so divisive for Canada as the construction of new pipelines for Alberta's crude oil. Chris Helgren/Reuters

The nation is losing billions of dollars in potential revenue because we don’t have enough pipelines — that’s according to the latest study from the Fraser Institute.

The report shows Canada’s energy sector will lose about $15.8-billion this year — that’s approximately 0.7 per cent of the national GDP.

And with a shortage of pipelines pushing oil overseas, the institute’s senior economist Elmira Aliakbari ays it’s forcing Canadian producers to sell barrels to the U.S. at much lower prices.

“The average price differential in 2018 based on the first quarter was US$26.30 per barrel.”

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“Insufficient pipeline capacity has imposed a number of costly constraints including over dependence on the U.S. market and reliance on more expensive energy transportation using rail transport.”

Aliakbari says the report is a strong indicator pipeline differences to projects like Kinder Morgan’s expansion need to be resolved between provinces and governments.

You can read the full report here:

Cost Of Pipeline Constraints: Fraser institute Study by Bailey on Scribd


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