CALGARY — Chris Severson-Baker, executive director of the Pembina Institute, made the following statement in response to the announcement by the Government of Alberta and Government of Canada on a new west coast pipeline:
“After months of speculation, it is now clear: there is no business case for a new west coast pipeline in Canada. If this was a smart economic venture; if there was any kind of reasonable return on investment to be made, a private company or companies would have put up the cash. Instead, Albertan and Canadian taxpayers will now shoulder the cost of 90% of this project – which will likely run into the tens of billions of dollars. Let there be no doubt: the Trans Mountain Corporation and the Alberta Marketing Petroleum Commission are not private proponents. They are wholly taxpayer-funded Crown Corporations.
“Clearly, this is not what either Premier Smith or Prime Minister Carney promised Canadians. Since last summer, both have repeatedly said a pipeline will only move forward if a private company paid for it. Indeed, both went to great lengths to induce a private company to do so. In Alberta’s case, this has so far included the unprecedented steps of taking barrels of oil as “in-kind” payments from oilsands companies (as opposed to cash royalties); providing the Alberta Petroleum Marketing Commission a loan of almost a billion dollars to go to Asia in search of buyers for those barrels; and finally contemplating using Albertans’ tax dollars to retool refineries in Japan to process the oilsands’ variety of heavy crude. These are all examples of Alberta taxpayer dollars and royalty revenue being used to artificially create market demand for Alberta’s oil, instead of being spent on vital public services. Still, none of it worked to get a private proponent to lead this project.
“Especially after Canadians’ experience with spending tens of billions of dollars on the TMX pipeline – a pipeline that has still not found a private sector buyer, even after it started transporting oil – it is hard to accept the logic behind this outcome.
“Further, the second promise – that a pipeline would only move ahead if the Pathways project was also built – has also been broken . There is nothing in today’s MOU announced between Canada, Alberta and the Pathways companies that actually compels the companies to move forward with this project. Indeed, the scale of carbon capture outlined today is already a significantly scaled back version of the original Pathways project that the companies spent years promoting to Canadians as their way of acting on climate, but which never even reached the application stage. Absent any type of actual emissions regulation, the companies remain free to keep on dragging their feet on building carbon capture, lobbying for more public money to do so, and advocating for more deregulation. There is nothing in this agreement that holds the oilsands companies accountable to their side of it.
“Perhaps the most concerning part of this announcement is the fact that the owners of the pipeline, Alberta and the federal government, must now hope that the oilsands industry will invest the billions of dollars that would be necessary to sufficiently expand production to fill this new pipeline. This can only be achieved through massive greenfield developments that will take decades to generate a profit - something the industry has shown zero interest in over the last decade, preferring to make lower-risk investments that maximize profits and minimize costs. The question of how the governments will make the oilsands companies do this remains unanswered – but the allusion in today’s announcement to the development of “fiscal frameworks” to enable production growth suggests yet more public dollars could soon be on the table.”
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Contact
Alex Burton
Director, Communications
825-561-8369
Background
Report: Don’t gamble Canadians money on a risky pipeline
Blog: Majority of Albertans don’t want taxpayer dollars used for pipeline; say province’s economy too dependent on oil and gas
