Our Energy East Pipeline Project proposes to transport oil from Alberta and Saskatchewan to eastern Canadian refineries and port terminals, effectively connecting resources to markets. Energy East will create more than 10,000 jobs and generate billions of dollars in tax revenue for the six provinces the pipeline goes through. This revenue will help build hospitals, open new schools or fix roads in New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan and Alberta.
Earlier this year, an activist group published a four-page brochure on Energy East making the claim that there was very little appetite in Quebec and New Brunswick for the oil the pipeline would supply, and that TransCanada was harbouring a covert agenda to export all this oil.
This is not true and we are correcting the record.
Western Canada is home to the world’s third largest oil reserves, but right now very little of this crude reaches the Eastern Seaboard, where the majority of Canadians live. Quebec and New Brunswick currently import more than 700,000 barrels of oil every day – or 86 percent of their refinery needs – from countries such as Algeria, Iraq, Saudi Arabia and Nigeria. At current oil prices, this is over $75 million drained out of the Canadian economy – every single day.
The import of higher-priced oil has exacerbated the plight of the Atlantic refining industry, which is struggling with overcapacity and profit-margin issues. Just last year, Imperial Oil had to close its refinery in Dartmouth, N.S, resulting in the loss of 400 high-quality, well-paying jobs because the economics are simply not there anymore.
Greater access to supplies of domestic crude would improve the financial viability of eastern Canadian refineries by giving them access to less-expensive, stable domestic supplies and increased negotiating power for long-term crude oil contracts. Industry experts, such as Patricia Mohr, a commodities analyst at Scotiabank, agree. When we presented the Energy East Pipeline Project in August, 2013, Mrs. Mohr estimated the pipeline could “encourage development of a larger domestic refining industry in Quebec and Atlantic Canada.”
Energy East would help Eastern Canada’s refining industry get back on its feet and build our country’s energy security. Once this primary purpose has been served, the Energy East Pipeline would supply export markets. TransCanada has always been open about this and it is not something we are shying away from. Accessing overseas markets will benefit all Canadians because it will ensure we get better value for our natural resources. Supplying the world’s growing demand for oil will strengthen Canada’s energy sector, which employs over half a million people and generates more than $20 billion in taxes for all levels of government.
Exporting part of Canada’s rising crude oil production will bolster our country’s trade balance. Exports are a good thing for our country. They provide economic growth. They create jobs. They generate tax revenue that helps our provinces build new universities, resurface hundreds of kilometres of highways or provide our seniors with home care. Canada is an export nation and this is nothing to be ashamed of.
Our country is in an enviable position. It abounds in oil. Not only can we set our energy and economic policies on our terms – and not depend on the whim of oil-rich exporting nations that do not share our political values or our stringent environmental regulations – but we can also become a major player on the global energy market. Energy East would help us achieve this.
Trevor Tombe, professor of economics at the University of Calgary, estimated in a recent research paper (“The Taming of the Skew: Facts on Canada’s Energy Trade”) that revenue from our country’s energy exports was now equivalent to $8,700 for every Canadian household. This is projected to grow much further – provided we can build the infrastructure to transport this resource. The Canadian Energy Research Institute projects that the oil sands production will create 800,000 new jobs between 2010 and 2035, and contribute more than $2 trillion to the Canadian economy. Two trillion dollars seems like an unfathomable number. To put it into perspective, it is three times the amount of Canada’s national debt.
Our country could play a significant role in meeting the rising global demand for crude oil and supporting the development and industrialization of emerging economies, such as India and China. Canada can also help a number of European countries reduce their dependence on Russian energy at a time of acute geopolitical tensions in Eastern Europe. The world needs energy, lots of it, and Canada is uniquely positioned to become a safe and reliable energy provider both at home and overseas.