Comment: Northern Gateway is in Canada's national interest
Oct 24 2012
I have yet to meet an entrepreneur who went into business with the ambition of exploiting nature, or an environmental activist categorically opposed to job creation.
Yet in the debate about the Northern Gateway pipeline, we increasingly find ourselves in a perfect dichotomy, the good intentions of natural resource protection and the development of needed infrastructure to secure Canada's economic future perceived as mutually exclusive. This does not need to be the case.
Canada is the G8 country whose economy is most dependent on international trade. The Asia-Pacific region is the largest crude-oil consumer and the third-largest natural-gas user in the world. Meanwhile, 97 per cent of Canada's oil and gas exports are to the United States.
Diversifying our export markets will provide a net benefit to Canada by opening secondary and tertiary markets for Canada's oil export trade with emerging Asian markets, and strengthen our position as a global energy producer. The U.S. will always remain our most valued trading partner, but that does not mean it should be our only trading partner.
This diversification will require new infrastructure with the potential to move resources to market. Since the end of 2010, new shale-oil developments in the U.S. and oversupply in the U.S. Midwest have lowered prices for North American crude and created a gap between the prices Canada is able to charge to export oil in Western Canada and the world price that it pays to import oil in Eastern Canada. This imbalance has been calculated to have cost the Canadian economy $891 million a month in 2011, or $10.7 billion for the year - 0.6 per cent of Canada's GDP in 2011.
The Northern Gateway project is one of a suite of market-diversification strategies that is in Canada's national interest. We are one of the world's few oil-producing countries able to increase production to match increasing global demand, and virtually the only producer that can offer political stability and a demonstrated commitment to improving environmental standards. We are further able to leverage the opportunities afforded by this market expansion to finance clean energy initiatives and develop new technologies that will reduce our domestic dependence on carbon-based fuels.
With the potential to generate thousands of construction jobs and a $270-billion increase to Canada's gross domestic product over 30 years, the advantages from Northern Gateway can benefit all Canadians. The project would confer significant benefits for aboriginal Canadians along the right of way, with a 10 per cent ownership in the venture, as well as hundreds of millions of dollars in procurement contracts and local employment opportunities.
Pipeline safety is a paramount concern, and it is one being closely scrutinized by the Joint Review Panel. Canadian firms currently operate a network of more than 100,000 kilometres of bituminous and natural-gas pipelines in North America. Ninety-seven per cent of our natural gas and offshore crude oil is moved by pipeline, and more than 99.999 per cent arrives safely at its destination. These are the fuels that, quite literally, power our economy - and pipelines provide a safe and efficient means to get them to market.
The current review process is specifically designed to thoroughly test all aspects of the project - in detail and in public. It enables the public to raise questions and concerns, and for those to be noted and addressed on the record. If the proponent cannot decisively prove that it can and will meet the highest standards in environmental protection and safety, the project simply will not proceed.
This process represents the best way to ensure that all points of view have a chance to be heard and fairly considered. We should support the review panel's work and let them make the decision that will best serve the public interest.
Perrin Beatty is president and CEO of the Canadian Chamber of Commerce.