Just as someone might put lipstick on a pig to make it look more attractive, the only reason to suggest building what would be Canada's biggest refinery at the western end of the proposed Northern Gateway project is to make the pipeline project look better. Unfortunately, the pig still grunts and the pipeline and refinery still come with huge environmental risks, increased pollution and little in the way of moving B.C.'s economy off of fossil fuel-fuelled growth. The refinery proposal is a strategy put forward last week by one of B.C.'s business elite, newspaper magnate David Black, who misjudged the source of B.C.'s antipathy to the project. British Columbians won't be seduced by the projected jobs a refinery would bring because opposition has little or nothing to do with employment. People care about the environmental damage of the project, the huge risks from tankers on B.C.'s pristine coast and climate change. The refinery option makes those concerns worse.
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The Northern Gateway pipeline project is the apple in the eye of the Canadian oil patch. In fact, it's essential to the future growth prospects of the industry. As long as the sector depends almost entirely on exporting its product to the U.S., the long-term growth outlook looks grim. U.S. demand for oil imports is already flagging as the country's own domestic production is taking off again. Also, U.S. citizens are driving less and starting to drive more efficient cars. Banking on U.S. demand for Canadian oil for continued growth in the industry is not a great bet. Further, the existing pipeline infrastructure is reaching capacity. Without more pipes to ship the oil, there's little room for growth.
This is why Northern Gateway helps hit two birds with one stone and explains why the federal government, the Alberta government and the oil patch are so gung ho on the project. It opens up new export markets and adds another 800,000 barrels a day of pipeline capacity. Unfortunately for these proponents, things haven't gone so well for the pipeline, with many pundits and politicians calling it dead, especially in light of Premier Christy Clark's "What's in it for BC?" position.
To address the B.C. premier's concern, some business leaders have said manufacturing jobs could be created if a petroleum refinery were built at the western end of the pipeline project. The thinking is that the public will support the project if it comes with promises of jobs. The proposed $13-billion dollar refinery would be Canada's largest refinery — more than double the size of the next biggest refinery in Alberta — and it would create about 3,000 jobs.
But it would emit more than six-million tonnes of greenhouse gas emissions, adding another 10 per cent to B.C.'s current GHG inventory. B.C. is required by law to reduce emissions by 33 per cent by 2020. Whether or not this would be possible with the mega-refinery is not clear. The Pembina Institute estimates that increased oil sands production made possible by Northern Gateway add another eight-million tonnes of GHG emissions.
With a refinery, Canada would export about 500,000 barrels of refined petroleum products a day, which means we'd still have a lot of tanker traffic moving through the precarious Douglas Channel and along the coast. Diesel and gasoline are lighter fuels and would potentially disperse more easily after a spill, but they are highly toxic and could have even greater impacts on marine life than bitumen. Diesel, in particular, is considered to be one of the most acutely toxic oil types.
When assessing the possible 3,000 jobs from the project, we need to ask, "Is this the type of employment we want to pursue in light of environmental concerns?" What other economic impacts would a project like this have? The $13-billion investment is a significant chunk of capital that could otherwise be used for other purposes. In fact, this amount would represent 40 per cent of the total annual capital investment in the oil and gas sector in 2011, making it one of the biggest single industrial projects in the country.
If we get the incentives right for polluters to pay for their emissions, that money could go to reducing their emissions and environmental impact. Although we aren't convinced that carbon capture and storage is a viable long-term solution, the cost of a CCS plant is a 10th the cost of the refinery. One has to wonder what else we could do with capital rather than investing it to deepen our ties to the fossil-fuel economy.