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Oil sands bitumen exports undermine Canada's economic future

Canada is headed down the wrong economic path by exporting raw oil sands bitumen, former ICBC CEO Robyn Allan said in a stirring presentation a week ago at the West Coast Oil Pipeline Summit. Allan highlighted the economic danger posed by oil sands pipelines including Keystone XL, Northern Gateway and Kinder Morgan that the federal government has been promoting in the name of jobs and growth. Below are excerpts from her presentation, "Oil Sands Development and the Economic Consequences".

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Graphics by Karl Jensen

Let me begin by being clear about the oil sector in Canada and who is running the show. 

Canada’s energy strategy is determined in the boardrooms of a handful of multinational corporations and by the governments of foreign countries through their state-owned oil companies.

The strategy is communicated to the federal and provincial governments through closed-door meetings with lobbyists and at state dinners over dessert in foreign countries.

It is supported by legislative changes that reduce environmental protection and public participation. 

Five multinational oil companies control 78% of current oil sands production. These companies are Suncor, Imperial Oil (whose parent is Exxon Mobile), Shell, Canadian Natural Resources and Cenovus.  

And new, primarily state owned companies, such as Norway’s Statoil, and China’s Sinopec, Petro China and the Chinese National Offshore Oil Company (CNOOC), that recently purchased Nexen.  

Harper: doing what's best for big oil 

So what is big oil’s plan for us?

They want to rapidly extract oil sands heavy crude called bitumen, mix it with imported diluent to allow it to flow through pipelines and export it as diluted bitumen to the US Gulf Coast along Keystone XL and to Asia along Northern Gateway and TransMountain’s twin.

This wasn’t always the plan. As recently as 2008 Alberta’s multinational oil producers planned to invest in upgrading and refining here in Canada ensuring the oil sector grew along with the extraction of raw resources.

These projects would have taken Alberta’s already strong downstream activity up a notch, stabilized the industry and securely established a domestic value-added supply chain.

When running for re-election in 2008, Prime Minister Harper promised that bitumen would not be exported to Asia but would be upgraded to Synthetic Crude Oil because of the value added benefits, meaningful job creation and control over environmental standards upgrading represents.

His government continued to publicly support upgrading oil in Canada right up until Enbridge filed its application for Northern Gateway.

But Harper’s promises obviously did not concern big oil.

Exporting raw bitumen is not good for Alberta’s value added, and it’s not good for the environment—it's only good for a handful of very large companies. And these companies got their way.

Economy vs. environment, the false trade-off

The oil sector has set up a fairy tale of woe.

It has attempted to create a fear in uniformed Canadians that if we don’t hurry up and approve these bitumen export pipelines, economic opportunities will be lost. 

They want to avoid transparency and accountability by having us focus on a false dichotomy.

These oil pipelines are not a competition between economic gain versus environmental, cultural and social cost—this is a fabricated trade-off developed by oil interests to pit ordinary Canadians against ordinary Canadians.

(13) Comments

David Sims April 30th 2013 | 9:09 AM

This is the best explanation I’ve seen of the entire bitumen export issue. Thanks to Robyn Allan [www.robynallan.com/] for her many studies which have helped us cut through the hype and misinformation surrounding bitumen export. I did not even know Stephen Harper campaigned AGAINST bitumen export in 2008.

Jean May 1st 2013 | 12:12 PM

This is a wonderful and concise article on the issue that just about anyone should be able to understand.   The thing I don't understand is why our PM is willing to sell our country short.   What is really in it for him and his "employees?"

Kevin Logan May 1st 2013 | 12:12 PM

Mrs Allan is a one woman wrecking crew, who systematically and methodologically crashes every dilbit myth the big oilers have rolled out in the past decade.

This an astounding, precise, simple roll out of the facts and truly an in depth expose of the ride where being taken on.

Allan's devotion to informing Canadians of the stark reality and how it runs counter to the oil narrative is tremendously valuable to the average Canadian.

We all owe her a huge debt of gratitude as clearly taking on these forces does not come without significant ramifications for her personal life.

Kudos to Mrs Allan and her commitment to informing Canadians of the facts.

Bob Conibear May 1st 2013 | 1:13 PM

Agee with not exporting bitumen.  Export product from bitumen.

It is not oil companies producing CO2 --it is US--YOU AND I.  We buy the product for our vehicles and transport.  It contribute 35% of the woilds CO2 emissions.  WE need the energy.  But WE do not have to use as much by far.  With today's technology we can reduce CO2 emissions by 80% over ten years.  Put your energy into makeing this happen---just buy the right vehicles--this is not hard!!  Buy in large lots to reduce price and increase availabilty.  Use the carbon tax revenue to acutually discount the purchase--not done now!!

Put you energy into elininating the CO2 from coal and gas fired power generators.  The 65% that everyone ignores.  This too is possible but use today's technology not 1950's.  Read up on SMR's and ADSR's.  Be practical!!

paul magnus May 1st 2013 | 3:15 PM

 

"This wasn’t always the plan.".  No, but the rush is on because people in the know know that climate change is going to severely restrict bitumen extraction and it's just lets get as much out of our investment as quickly as we can. Same thing happening for coal!


Forward Thinker 2 May 1st 2013 | 9:21 PM

Boy what an articulate well thought out essay. Before reading this, I had similar misgivings about the argue moments in favour of exporting bitumen, but this is a great summary. Most of what pro pipeline advocates make little sense when they argue it in Canada's interest.  I would love to see Oliver debate her. Maybe she will run for parlement.

Earl Richards May 2nd 2013 | 9:09 AM

There will be no Exxon Valdez on the waterways between Vancouver Island and the mainland.

Durward May 2nd 2013 | 3:15 PM

There has not been a refinery built in Canada in over fifty yrs because the Enviro nazis forbid it and now want to use that as a weapon against selling raw bitimen?

There has been tanker traffic through BC's waters since the 60's and never has there been a spill, furthermore more oil spews into the open ocean from fissures in the sea floor everyday than all of humanity uses in a yr.

What the hell does an office working civil servant know of free enterprise and wealth creation?, where does he think money comes from?, we can't just print it!, it has to come from resources and value added industry uses.

BC is a resource Province, you sure as hell can't build anything here as added value, the same dimwits shut those down too(think refinery).

It's high time these brain-dead enviro nazis were forced to provide facts to back up their stupid dooms day conjectures, which they can't...Just like Global warming.

I call BS on this clown.

 

 

Fred Colbourne May 2nd 2013 | 8:20 PM

Very interesting and informative. Seems like we should have focused on energy policy instead of climate policy.

The bottom line is that climate alarmism has sidetracked the national debate on energy policy. 

But why should climate alarmism spare Canada when it has already wrecked UK and German energy policy.

Fortunately in Canada, the energy utilities will be able to keep the lights on.  

Sleel May 5th 2013 | 1:13 PM
paul magnus wrote:

 

"This wasn’t always the plan.".  No, but the rush is on because people in the know know that climate change is going to severely restrict bitumen extraction and it's just lets get as much out of our investment as quickly as we can. Same thing happening for coal!


 

Yeah. So much climate change. That's why the temp hasn't risen in 16 years, and we have the coldest/latest spring in how long?

  The real reason we aren't going to be exporting refined products is because of NIMBY. Which one of you is going to be part of the demonstrating SUPPORTING a new refinery in your backyard? When was the last time a new refinery was built? Oh right. NIMBY in our lifetimes.

Jeffrey Simpson August 15th 2013 | 10:10 AM

One of the best descriptions of the Canadian problem I have read; Allyn is to be congratulated and thanks to the VO for printing it for all of us to read.

Joseph September 10th 2013 | 5:17 PM

So the average reader is aware, the following companies named in this article as 'multinationals' are actually Canadian:

1. Suncor Energy - largest Canadian integrated energy company and one of Canada's largest corporations.

2. Canadian Natural Resources Ltd (CNRL) - Canadian company, like Suncor, born and bread in Alberta.

3. Cenovus - like Suncor and CNRL, Cenovus is Canadian through and through.

Other truly Canadian companies operating in the Oil Sands are MEG Energy, Southern Pacific Resources and Syncrude.

This article while well written is so fundamentally and purposefully flawed - no wonder the VO loves it!

Daisee January 6th 2014 | 10:10 AM

to get this pushed through before too many Canadians become informed and educated. Cold comfort though even if we do manage to boot out this draconian party, the damage will have been done.