[h=1]Alberta’s oil should flow east, not west[/h]
By Eddie Goldenberg, Calgary Herald
Much of the controversy around the Northern Gateway pipeline is fundamentally about how Alberta oil should move to overseas markets. Prime Minister Stephen Harper is rightly championing the urgency of diversifying our oil and gas export markets beyond the United States. But it is unlikely to happen without the federal government playing an active and constructive role to ensure that Alberta oil can reach tidewater.
It might be in the national interest for the federal government to put the economic benefit to Canada of a pipeline through British Columbia ahead of a somewhat more remote risk of a serious crude oil spill if there is no other practical way to move Alberta oil to the sea. Fortunately, there is another way — a route that lies to the east, and the Atlantic.
It avoids any risk of a future environmental disaster on the pristine British Columbia coastline, and also avoids the real possibility of protracted legal actions delaying the proposed Northern Gateway pipeline for so long that potential Asian markets turn elsewhere for supply. It has the added advantage of eliminating the political risk that jeopardizes the possibility of the pipeline through British Columbia.
Over the last year, as the prospects for the Northern Gateway pipeline seem to have grown steadily dimmer, some pipeline companies have begun to express serious interest in the idea of shipping Alberta oil to the East Coast. The idea has also attracted widespread political support from such diverse players as Premier Alison Redford, Wildrose Party Leader Danielle Smith, federal NDP Leader Tom Mulcair and New Brunswick Premier David Alward. Former New Brunswick premier and current vice-chairman of the TD Bank, Frank McKenna, calls the idea of a pipeline to the East Coast, “a bold project, national in scope . . . an extraordinary catalyst for economic growth, and a powerful symbol of Canadian unity.”
Building a pipeline to the Atlantic would require converting existing natural gas pipelines or reversing existing crude oil pipelines, with relatively little need for new construction except for a new pipeline from Montreal to Saint John. It would open new markets for Canadian oil in Eastern Canada. It would open the high seas to Alberta oil, not only to service fast-growing new Asian markets by shipping through the Panama Canal, but also to service Europe and the Atlantic coast of the United States.
It would increase the amount of Alberta oil sold at world price, rather than at the current discounted price in the mid-American market. It would also create the opportunity to upgrade eastern Canadian refineries along the way, and particularly the Irving refinery in Saint John to process western Canadian heavy oil and bitumen into refined petroleum products.
The role of the federal government should be to co-ordinate, cajole and facilitate such a national economic project. It is a role that federal governments have performed from the building of the CPR, to the Trans Canada pipeline, to the St. Lawrence Seaway; and with tax incentives in the early days for the Alberta oilsands and Hibernia on the East Coast.
Today, the Harper government is providing financial support for the new international bridge at Windsor, Ont., infrastructure for the Asia Pacific Gateway, and loan guarantees for the hydro project between Labrador and Nova Scotia and Newfoundland.
An oil pipeline from Alberta to the Atlantic will also be critical to Canada’s economy over at least the next quarter century, and would generate considerable new tax revenue for governments. Opening access to tidewater for Alberta oil, as well as to eastern Canadian refineries, would even justify some limited upfront federal financial assistance, contingent on repayment over the life of the pipeline, if absolutely necessary to get the project underway.
Premier Redford, with her modern, forward-looking, pan-Canadian vision, has taken the lead in promoting a national energy strategy. Such a strategy requires action from the national government to move from just a vision to concrete results. An oil pipeline from Alberta to Eastern Canada that opens new markets in Canada and overseas for Alberta oil, mitigates environmental risk in British Columbia, preserves First Nations salmon rivers, increases the value-added processing of Canadian natural resources, and provides new economic opportunity across the country, would be a major component of such a strategy and a precedent for further co-operative, pan-Canadian energy projects.
Eddie Goldenberg is a partner at Bennett Jones, LLP and chair of the firm’s government affairs and public policy practice. He is a former chief of staff to Jean Chretien when he was prime minister.