NEB recommendation a milestone for Canada's future

Contributed to The Vancouver Sun
Tim McMillan
President and CEO
Canadian Association of Petroleum Producers
May 25, 2016
Canada is a trading nation. Trade has been, and continues to be, a source of Canada’s collective economic success.

That’s why pipelines, like highways, railways and ports, are such crucial economic infrastructure. Pipelines help move and trade our energy.

And that’s why the National Energy Board’s recommendation to approve the expansion of the Trans Mountain pipeline, which has safely and reliably supplied the Lower Mainland and the Interior with oil for more than six decades, is truly a milestone for Canada’s future. It sends a clear message: building the infrastructure to get our resources to market is in the best interest of our country.

New pipelines will help connect Canada’s landlocked oil reserves, the third-largest in the world, to tidal ports and from there to global markets where demand for oil is growing. Without them, Canada’s ability to trade one of our country’s most significant resources would be compromised, along with the substantial benefits linked to responsible oil development: jobs, government revenues and economic growth.

The Canadian Energy Research Institute estimates the western Canadian oil industry would contribute an estimated $1.5 trillion in provincial and federal taxes, and provincial royalties over the next 20 years. Governments use these revenues to pay for social services such as health care and public infrastructure, including schools, roads and hospitals.

This shows that getting the green light on energy infrastructure projects such as the Trans Mountain expansion would be a tremendous stimulus for the Canadian economy.

The NEB’s conditional approval is the result of a rigorous review. It charts the path to ensure the pipeline is expanded to the highest safety and environmental standards. As well, the recently announced Trans Mountain Pipeline Expansion Ministerial Panel and the interim principles outlined by the federal government are important steps to enhance public confidence in the NEB’s decision-making process.

The case for additional pipelines is strong.

North American market dynamics are changing. Canada can no longer rely on the United States to be our only customer for oil.

Contrast that with the fact that the world will need growing volumes of oil for many decades to come. The International Energy Agency says global oil demand will increase 12 per cent by 2040. The IEA also says that a quarter of total world energy demand will still be met by oil by 2040. Asia’s rapidly developing economies account for most of this demand growth. China, for example, is forecast to grow its oil demand by nearly 50 per cent by 2040, according to the IEA. Without better pipeline access to tidal ports, Canada would be unable to participate in the global oil market. Others would meet that need, and for Canada, an economic opportunity would be lost and nothing gained.

Canada has the energy the world needs. We produce and transport oil under more stringent environmental regulations than other energy nations.

The new Alberta Climate Leadership Plan is one of the most progressive regulatory frameworks in the world. It increases the price for carbon and toughens greenhouse gas reduction measures Alberta has had in place since 2007. It puts a limit on oil sands emissions.

Safety measures for pipelines and marine transport are equally stringent.

This March, the B.C. government introduced new measures to enhance spill preparedness, response and recovery capabilities across the province. The federal government, meanwhile, had announced measures to further modernize Canada’s marine navigation system, fortify emergency planning and response tools, and strengthen the polluter-pay principle. Canada now has one of the highest liability and compensation regimes in the world.

We support these new measures because we know Canadians’ expectations for how we develop and transport our resources are high.

Pipelines are crucial infrastructure for Canada. Building and operating them safely will get Canada better world prices for its resources, generate government revenues for public services and create jobs for Canadians.

Expanding the Trans Mountain pipeline is indeed in Canada’s collective public interest.

Our country will be better because of it.