The National Post is Canada’s second largest national paper.
CALGARY — Canadian Press – The inability to get oil sands crude to the right markets is costing the Canadian economy dearly, according to a new report paid for by the Saskatchewan government.
Each stalled pipeline project means a loss to the Canadian economy of between $30-million and $70-million every day, said the report penned by the Canada West Foundation, a Calgary-based think-tank.
“The loss to the Canadian economy will be devastating if we don’t dramatically expand our pipeline capacity to multiple markets,” said Canada West Foundation CEO Dylan Jones. “Abandoning this industry to oil producing countries with lower standards is not leadership.”
The report was commissioned by the Saskatchewan government, whose premier has been an outspoken supporter of new pipeline projects. Most recently, Brad Wall, along with 10 U.S. governors, signed a letter urging U.S. President Barack Obama to approve the Keystone XL pipeline.
In recent months, oil sands crude has been trading at a painfully steep discount to both U.S. and global light crude benchmarks. It’s a trend that has both eroded oilpatch profits and caused the Alberta government to warn of a $6-billion budget shortfall.
At the heart of the problem is a lack of adequate pipeline capacity to get that crude to the markets that want it most. Proposals of eastbound, westbound and southbound pipelines are in varying stages of development, but environmental opposition and political wrangling makes their timelines uncertain.
There are currently seven pipelines that carry Alberta crude outside of that market, the majority of which go to the U.S. Midwest. A few also go to the U.S. Rocky Mountain states. One, Kinder Morgan’s Trans Mountain, goes to the B.C. Lower Mainland and U.S. Pacific Northwest, but it’s full.
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2013/02/07/each-stalled-pipeline-project-costing-canada-30m-70m-a-day/?__lsa=71eb-db89