Resource World Magazine

74 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 7 O ne thing is being largely left out of the pro- vs anti-pipeline discus- sions of late – the plain and simple fact that we need them. No one has captured the essence of this argument better than Jock Finlayson, exec- utive vice-president of the Business Council of British Columbia, Canada. In a November column for Troy Media, Finlayson and co- author Denise Mullen, the BCBC's director of environment and sustainability, outline in no uncertain terms how Canada, in par - ticular, has abandoned good business sense and has allowed pipeline growth in the United States to far outstrip it, thus jeopar- dizing Canada's ability to get its vast oil and gas resources to market. The statistics they quote are disturb- ing. Canada has about 840,000 kilometres of pipelines, compared with 4.3 million kilometres in the US. Our neighbours to the south can boast a 25% increase in hazard- ous liquids pipelines in the past decade, and two-thirds of the US pipeline network transports refined petroleum products or crude oil. While the US added 8,600 kilometres of pipeline capacity in 2014-15, equivalent to 7.5 Trans Mountain pipelines, Canada added zero and, in fact, has not built a major oil pipeline in many years. "As Canada dithers and the volume of our oil and natural gas available for export expands, constrained pipeline capacity inevitably means price discounting (as well as more oil being shipped by rail)," the authors say. "Revenues for Canadian oil pro - ducers decrease as shipping costs rise and other suppliers make inroads in the markets where energy demand is growing." That means "collateral damage" – the loss of full-time, well-paying jobs, shrunken energy industry supply chains and diminished revenues for government, according to Finlayson and Mullen. Facts are facts: Canada's only foreign market for crude oil and natural gas is the United States. And so it isn't hard to see that, "A one-customer business model is obviously risky for any supplier," say Finlayson and Mullen. The problem is simple, when not clut - tered with the need to explain the obvious to those who would see all pipelines van- ish from the landscape. The US wants to become a net exporter of energy instead of a net importer. So they have boosted domestic production, in 2015 reach- ing the highest production levels since 1972 and with more growth expected in the coming decade, especially under the new American administration, which has vowed to increase energy security and depend less on others. Of course, say Finlayson and Mullen, with the right pitch the US could be con - vinced to view Canada as a "reliable and friendly" source of energy as they seek to lessen their dependence on Middle Eastern and other offshore suppliers. This, they say, is the argument Canadian gov - ernments should be making to American policy-makers. The reality is that petroleum products are needed now and will be for many years to come. International Energy Agency (IEA) projections suggest that petroleum will be needed to meet a sizeable portion of the world's energy demands despite governments striving to meet the clamour - ing demands of climate change activists. The IEA predicts China will be the world's largest oil importer by 2020 while India will rank second by 2035 – a seemingly obvious growth opportunity for Canada's energy sector. "One thing is certain: If Canada fails to develop the capacity to export oil and other energy products to Asia, other sup - pliers (including the US) will happily fill the void," say the authors. Why new Canadian pipelines make sense by Bruce Lantz IS IT BETTER TO CANCEL PIPELINE PROJECTS ONLY TO RELY ON MIDDLE EASTERN SUPPLIERS AND LOSE MILLIONS OF DOLLARS AND MANY JOBS AT THE SAME TIME? OIL & GAS

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