"This loss of revenue means less investment, less job creation and ultimately less prosperity for Canadians."
Pipeline shortage cost Canada’s energy sector $20.6 billion in 2018
By Elmira Aliakbari
and Ashley Stedman
The Fraser Institute
and Ashley Stedman
The Fraser Institute
With pipeline shortages driving down the price of Canadian oil, the losses for the energy sector – and for Canada’s economy – are staggering.
According to a new study, insufficient pipeline capacity cost Canada’s energy sector $20.6 billion – or one per cent of the country’s economy – in foregone revenues last year.
Despite increased oil production in recent years, Canada has been unable to build any new major pipelines. High-profile projects including the Northern Gateway and Energy East projects have been cancelled. And the Trans Mountain expansion, Line 3 replacement and Keystone XL pipeline remain mired in delay.
Take the Trans Mountain pipeline expansion project, for example. After years of regulatory delays and political interference, the project’s future remains uncertain. The proposal to expand the existing Trans Mountain pipeline between Edmonton and Burnaby, B.C., was first approved in 2016. However, the Federal Court of Appeal rescinded that decision last year, ruling that neither the environmental review nor the Indigenous consultation were properly completed.
And despite a revised National Energy Board ruling that deemed the project in the public interest, the B.C. government continues to oppose the project and is pursuing legal means to block the expansion.
Such delays and political opposition raises serious concerns about whether the pipeline will ever be built.
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