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".
They hope our fear of economic loss if we don’t approve these pipelines, is greater than our fear of environmental, social and cultural harm if we do.
The real picture is that if we accept bitumen export pipelines it will not only bring with it significant environmental, social and cultural harm, but economic harm as well.
A full and proper accounting of the impact of rapid bitumen extraction and export tells us all Canadians end up on the same side—a side that says we can’t afford to allow these bitumen export pipelines to be built.
We cannot allow a handful of powerful multinational oil companies and foreign countries through their state-owned oil companies to dictate an energy strategy that:
hollows out our resource sector;
robs Canadians of meaningful jobs and environmental standards;
crowds out BC’s legitimate economic activity;
increases petroleum product prices for Canadian consumers and businesses; and
puts our terrestrial and marine based ecologies directly in harms way.
To put it simply: when it comes to non-renewable resources, rapid extraction and export of raw bitumen is not economic development.
Development means enhancement, value added, improvement—some form of contributing to a better state because of economic activity.
There are essentially two things you can do with bitumen once it comes out of the ground. Upgrade it to Synthetic Crude Oil—SCO—so it can be processed in a refinery and become petroleum products like gasoline and jet fuel.
This is the value chain that benefits Canada and our economy.
Or:You can dilute bitumen with a substance, like imported condensate, to enable it to move down a pipeline for upgrading and refining in foreign markets.
This is not development—it is exploitation.
This approach will deliver a worsened economic, social, environmental and cultural reality to BC, Alberta, and Canada.
That is the truth and it is not anti-business, or anti-industry. It is fact.
If you extract and export raw bitumen diluted with condensate, only 35 percent of the value of our resources is captured within our economy—the rest of the value is shipped down the pipeline along with the jobs and environmental standards, along with the wealth and government revenue.
Upgrading bitumen captures roughly 70 percent of the value of oil sands heavy crude.
While refining it to end user products captures 100 percent of the value in our economy: