To Pipeline or Not to Pipeline. That is the Question

Prior to the global collapse in oil prices starting back in mid-2014 (so no, not Ms Notley's fault since she was elected in 2015), there was talk about building new pipelines.  Northern Gateway and an extension of TCP's eastern pipeline were part of the conversation at the time.

The industry is certainly volatile and there is no chance that will change.  The realities of this volatility are well explained in this article from the New York Times.

Since the oil price collapse, however, the clamour has intensified.  The mantra now is that Alberta needs access to "tidewater" so it can get better prices.  One would almost come to believe that Alberta's oil (conventional or otherwise) had always been confined to Alberta's borders and that we needed new pipelines to fix that situation.

The reality is that Alberta's crude has been exported for decades.  South to the USA, east to at least Montreal and west to BC's Lower Mainland.

Now, of course, two new pipelines have been approved as of late November: Kinder Morgan's Trans Mountain expansion to the Lower Mainland and a shorter line through Saskatchewan, Enbridge's Line 3.  Northern Gateway has been nixed and there appears to be a ban coming on increased tanker traffic along BC's coast.

Some media outlets waxed enthusiastic about these developments, as in this one from the Financial Post.

One serious question, among many, that have been raised is whether the pipelines are really needed.

In the wake of the Kinder Morgan Trans-Mountain approval, Alberta Premier Rachel Notley visited BC in an attempt to sell its benefits to people in this province. An understandable effort given her understanding of the concept of social license.  As an aside, this article contends that there is no such thing as social license.  You decide.

But are the claims of benefits unrealistic?  This article says they are.  There are the costs from the increased GHG emissions and the risk of spills, either from the pipeline or, more likely, from oil tankers.  And the forecasts of jobs and value to the province's GDP appear to be exaggerated as well.

The Tyee (a westcoast publication) pointed out Four Harsh Truths for Canada's Lovestruck Pipeline Polliticians.  

As Economist Jeff Rubin pointed out, there is insufficient demand for Alberta's bitumen to justify a pipeline, taking the risk that the pipeline will become a "stranded asset".  He goes on to say:

"The reality is that Asian markets pay less, not more, for the bitumen that Canada wants to sell than U.S. refineries," he told Crowe.

This article contends that "Big Oil" has been manipulating its forecasts to maintain the myth that new pipelines are needed.  The article claims that their math has been false.

There is a plethora of analysis out there that brings into question the very need for pipelines, and I haven't included any articles that focus on the increased emissions that such pipelines will add, all the while these same governments are parading their new-found awareness of the climate change crisis.  

It's quite clear that the "debate" (or fight, if you like) has only just begun.