Why B.C. really turned down the Northern Gateway pipeline

No real economic benefits.

 

While environmentalists and native groups appear to have won a major victory as the B.C. government rejected the Northern Gateway project in a written statement to the federal joint review panel, it is more likely the economic benefits of not having Enbridge’s pipeline running through the province outweighed the advantages.

The submission said that Calgary-based Enbridge has not demonstrated that it could effectively respond to oil spills in the environmentally sensitive coastal area of British Columbia. The route of the pipeline would connect Edmonton with Asian markets through the harbor of Kitimat, 650 kilometers north of Vancouver.

However, it may be that economic drawbacks of an oil spill were a greater factor in the rejection of the pipeline plan rather than environmental issues. While the pipeline would carry bitumen from Alberta’s oilsands to the coast of B.C., the province would not see enough economic benefit to offset the costs of cleaning up potential spills or the damage to key industries caused by a spill.

Last year the Canadian Energy and Research Institute estimated that the pipeline would add $4.7 billion to the provinces GDP over 25 years. While the pipeline will create jobs and have a positive impact, it pales in comparison to the importance of the tourism industry to the province which is worth $14 billion annually. Needless to say, if a major spill were to happen, the cruise ship industry and sport fishing along with commercial fishing industries and aquaculture would be in peril.

B.C.’s growing cruise ship industry is estimated to account for $1.16 billion in direct spending and $2.38 billion in indirect spending for the province annually but images of oil-soaked beaches broadcast to the world would devastate it.

“If (Enbridge wants) to see additional pipelines, they will need to accelerate improvements toward regulating upstream impacts of oilsands development and minimizing the risk of oil spills,” said Nathan Lemphers, of the Pembina Institute, a Calgary-based clean energy think tank.

While British Columbia appears to be closing the door on Northern Gateway, the project is not officially dead. The review panel will hear final arguments starting next month, and a final report is due to the federal government by the end of the year. Its final report is expected to include strict conditions on Enbridge is the project is to move forward.
With files from Mike McCullough and The Canadian Press.

 

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