While B.C. may not get the oil royalties from the Northern Gateway pipeline that Alberta will get, a new study by the Canadian Energy Research Institute (CERI) suggests it would benefit more than Alberta in terms of job creation and overall gross domestic product.
The B.C. government estimates it will only get 8% of the economic benefits from Enbridge's Northern Gateway pipeline, but will assume 100% of the risks from oil spills. Premier Christy Clark has drawn a line in the sand, saying the province will not support the $6 billion project unless B.C. gets a bigger share of the pie.
But in Pacific Access Part II – Asia-Directed Oil Pathways and Their Economic Impacts – the latest in a series of reports – CERI suggests B.C. is underestimating the benefits it would receive from the construction and operation of the Northern Gateway pipeline, as well as other projects, like Kinder Morgan's $4 billion plan to twin its Trans Mountain pipeline.
According to CERI, the construction and operation of the Northern Gateway pipeline to Kitimat would generate $8.9 billion in gross domestic product for Canada over the next 25 years, with $4.7 billion going to B.C., $2.9 billion to Alberta, and $608 million to Ontario.
The Nechako region would get the greatest direct benefits, it says – about $655 million over 25 years. The North Coast would enjoy $575 million worth of activity.
The project would create 30,000 jobs in the construction phase, CERI concludes, and 2,500 permanent jobs.
The Northern Gateway pipeline alone would generate $2.3 billion in tax revenues over a 25-year period, CERI calculates, with $1.45 billion going to Ottawa, $545 million to provincial and regional governments in B.C., $162 million to provincial and municipal governments in Alberta.
Kinder Morgan's $4 billion Trans Canada pipeline twinning plan would generate more than $8 billion in total additional GDP over the next 25 years, CERI estimates, $4.4 billion of which would go to B.C., $2.4 billion to Alberta, and $523 million to Ontario.
While CERI concludes that pipelines are the most economical way of moving oil from the oil sands of Alberta to the West Coast, they're not the only way.
The report also suggests the oil could be shipped from Alberta to the west coast by rail.
"While rail is emerging as a serious option to pipeline transportation, the former is subject at the present time to limited availability of rolling stock and storage capacity," the report states.
