By Alex Pourbaix, President, Development
In his column, “If Alberta oil heads east, benefits for Ontario are hard to see” economist Jeff Rubin makes a number of errors about TransCanada’s proposed Energy East crude oil pipeline. This project, as well as other investments TransCanada will make, will create significant economic benefits in Ontario and people will continue to receive reliable and affordable natural gas service once this important infrastructure project is built.
For starters, the $12-billion Energy East project will benefit Ontarians greatly. Energy East will create 10,000 full-time jobs – good paying jobs for Canadians to provide for their families. In Ontario, Energy East will create 2,300 direct jobs during development and construction, and 6,000 spin-off jobs.
Then there are the longer-term benefits — $13 billion in GDP for Ontario’s economy over the project’s lifetime, and $3.5 billion in government tax revenues to repair roads, build schools and hospitals, upgrade crumbling buildings — the list goes on. For many communities, the money TransCanada will pay will replace lost revenue from mills, mines and other facilities that have been shut down.
TransCanada’s annual property tax contribution to Ontario coffers through Energy East would be $42 million. In fact, more of the GDP benefits of Energy East will be realized in Ontario than in Alberta. The $13 billion that the project will contribute to Ontario’s GDP during development, construction and operations is equivalent to the annual contribution from Ontario’s auto industry.
Canada imports 700,000 barrels of oil each day from foreign countries with sketchy human rights records. Energy East would push out this oil, replacing it with western Canadian crude that is less expensive and developed under far tighter environmental regulations. Energy East is capable of delivering light and heavier blends of oil to refineries in Quebec and New Brunswick. Surely, developing domestic oil resources to supply our own refineries with a product produced on our soil makes far more sense than the alternative.
Ensuring Ontarians receive natural gas when they need it
Rubin then states construction of Energy East would see Ontarians subsidize the project and end up paying a lot more for their power. Nothing could be further from the truth.
We are building new pipeline infrastructure in Ontario to ensure Ontarians will receive gas when they need it to heat and cool their homes and cook their food. TransCanada is committed to putting forward a proposal to the National Energy Board that ensures the costs for our natural gas customers will not increase as a result of Energy East.
Nor will Energy East be ‘subsidized’ by Ontario and Quebec natural gas customers. In fact, we expect gas transmission costs to drop because the Energy East conversion will reduce the Canadian Mainline cost of service which will benefit our shippers.
No substantial impact on GHG emissions
Rubin then talks about oil sands greenhouse gas emissions. The facts show Energy East will not substantially affect the rate of extraction or combustion of Canadian oil sands crude and its global impact.
More importantly, if Energy East is not built, the oil will move by truck, rail and tanker instead of a pipeline, the safest and most environmentally responsible method of transporting oil and natural gas over long distances.
When it comes to GHGs, the oil sands produce less than one fifth of one per cent of global greenhouse gas emissions – an extremely small number. Oil sands derived crudes are similar in composition to other heavy oils and moving product by Energy East will simply offset foreign supplies.
The Energy East Pipeline Project is an historic opportunity to connect the oil resources of Western Canada to the consumers of Eastern Canada, creating jobs, tax revenue and energy security for all Canadians for decades to come. That includes Ontario businesses, consumers and community organizations.
This letter is the full version of a Letter to the Editor published on the Globe and Mail website on July 10, 2014.