CALGARY — JANETTA McKENZIE, director of the Pembina Institute’s oil and gas program, made the following statement in response to news that the Government of Alberta will be the proponent for a new oil export pipeline.
“If a new pipeline promised to be profitable, there would be a private sector proposal in some phase of development. It speaks volumes that after months of pressure from the Alberta government to bring forward a proposal, and offers of concierge service from Ottawa, industry has still refused.
“To be clear – this is a multi-decade gamble prefaced on the hope that the world will not reduce oil consumption, despite the advent of lower cost alternatives and the increasing risk of dangerous climate change. It is a bet that private sector proponents are not willing to take on.
“It’s economically perverse that the provincial government will spend public money on a project the private sector has balked at, while simultaneously sabotaging private investment in renewable energy projects the market is demanding.
“Our recent analysis shows that oil and gas job creation around the world is increasingly disconnected from production and profit levels. Many Alberta families are living through that pain right now following the recent layoffs at Imperial Oil and Cenovus. These developments are reminders that the oilsands industry in Alberta is engaged in short-term behaviours to maximize profits in the here and now, but don’t set them up for long-term expansion – because oil demand across key markets is already softening.
“I was concerned that the Premier and her ministers made no mention of the downside risks of a new pipeline, from runaway climate-changing emissions to expanding tailings ponds and increasing threats to our water, air, and land. This is not what nation-building looks like.”
Quick facts
- Premier Smith’s announcement of taxpayer-funded pipeline development comes only days after her government undermined the investment case for carbon capture in the oilsands by freezing the price of Alberta’s industrial carbon credits, known as TIER, and allowing companies to receive double credit in some cases.
- Pembina’s recent report Drilling Down shows that job creation in the oil and gas sector has been disconnected from production levels since fundamental industry restructuring began in 2014.
- Prime Minister Carney has said publicly that a new pipeline as part of a “grand bargain” must ship “decarbonized oil,” but oilsands emissions continue to rise. According to the latest figures, oilsands emissions have grown 151% since 2005 (while Canada’s emissions overall have fallen 8.5% in the same period).
- Global demand for oil is even more uncertain than it was 10 years ago. For instance, China’s oil demand is already stagnating, as electric vehicles are replacing gasoline powered vehicles and renewable energy deployment has accelerated dramatically.
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