Guest Commentary

By Randy Kerr

 

Prime Minister Stephen Harper and federal Natural Resources Minister Greg Rickford have given their conditional approval to Enbridge Pipelines to construct the Northern Gateway Pipeline. Assuming that Enbridge can meet the 209 very stringent conditions, why wouldn’t they?

Given the recent events in the Middle East and the United States’s continued delays on granting a permit for the Keystone XL Pipeline, it is vitally important for Canada to gain West Coast access for Canadian oil products.

The recent violence in Iraq, which seems destined to fall into the same type of sectarian chaos that has recently enveloped Egypt, Libya and Syria, serves as a painful reminder to the U.S. and the rest of the world that over-reliance on that area of the world for oil can result in serious market disruptions and price spikes. Countries that are net crude oil importers are desperately looking for new supplies of crude oil from stable marketsand Canada is clearly at the top of their lists.

We know oil and natural gas can be developed and shipped safely; Canadian companies have been doing it for over 60 years. In terms of the Northern Gateway project, The joint review panel that reviewed Enbridge’s permit application (which includes officials from the National Energy Board and the Canadian Environmental Assessment Agency) set 209 very stringent conditions which must be met for Gateway to be built, ensuring a level of safety that will set the bar for all future Canadian projects.

Opponents of Canada’s oilsands and the various pipeline projects are virtually unanimous in saying the world needs to move immediately to new forms of energy or a “clean energy” future. However, they have never really given Canadians any details on how such a shift would work and these claims are both completely unsupported by any valid scrutiny and totally irrelevant to the debate over the safety of the Northern Gateway project.

The U.S. Department of Energy has projected that American drivers will continue to rely on traditional transportation fuels for 90 per cent or more of their transportation needs well into the future. The agency projects that gasoline and diesel use will increase significantly over the next 40 years despite increase in the use of renewable fuels, electric vehicles and natural gas vehicles. This demand has created a market for Canadian resources that will continue to grow for the foreseeable future. The same is true with emerging markets like China and India.

Canada is fortunate to have access to a large and wide variety of natural resources the world wants and needs. Northern Gateway, TransMountain Express Keystone XL and Energy East all have something in common: they are designed to bring Canadian oil to those world markets.

They also are all critical to the Canadian economy. The development of oil and gas resources has created millions of jobs in this country and generated billions (soon to be trillions) in economic activity. And don’t forget royalties and taxes to our governments, close to $783 billion over the next 10 years, according to the Canadian Energy Research Institute. That’s a lot of hospitals and schools, doctors, nurses and teachers.

The politically-driven delays in the permitting process for the Keystone XL Pipeline have shown us the vulnerability that total reliance on one market poses for all of us in Canada. The U.S. has been (and will continue to be) a great friend and customer, but the debate over Keystone has shown us it is time to diversify our markets. A 2013 report released by the Canadian Chamber of Commerce estimates we are also losing $50 million of value on our oil every day due to the fact we must live with discount prices due to a lack of market access. We can quibble over that number but the fact remains shipments off the West and East Coasts will make Canada more competitive, strengthen the Canadian economy and makes us a true “energy superpower.”

None of this means we should be encouraging governments or companies to run roughshod over local stakeholders. Canada is a great country founded on compromise. Compromise has helped us build great projects such as the national railway and St. Lawrence Seaway, which connect this vast nation both internally and to the world. Aboriginal groups have rights and titles that need to be accommodated, the environment needs to be protected, and the project needs to provide economic benefits for the entire nation.

We believe Enbridge has shown this project will more than meet those needs and Northern Gateway should be built.

 

Randy Kerr is executive vice president, Canada for HBW Resources and executive director of the Canadian Natural Resource Alliance.