If the Enbridge Northern Gateway twin pipeline proposal is allowed to proceed, Alberta and Canada will lose significant profits, revenue and worse, a reduced market potential.
The current claim being made during the Joint Review Panel economic debates is the project will provide an increase in revenue due to an increase in world markets. The United States of America has been Canada’s only customer; therefore the concept of selling the Alberta bitumen product to Asia is promoted as an increase in participating in the world markets. The second claim is the world price of oil is higher than that currently paid to Canadian producers by American Corporations and the Enbridge project will access these world markets.
All of these claims are bold faced lies.
Enbridge will build the pipeline, if approved, for a select and exclusive market. They are a transportation company building a system for a customer. Enbridge is not an oil company. No other world customers can purchase the Alberta Bitumen from the pipeline except those they are building it for. In the industry terminology, the pipeline is “fully subscribed”. Although Enbridge remains secretive about exactly who they are building the pipeline for, China is well known to be the major holder of the subscribed capacity of the proposed pipe. It is widely believed the remaining capacity, if any, is held by American interests.
This means their will be no extra world markets except China.
China owns significant interests in many Northern Alberta Oil Sands holdings and owns others outright. Their extensive purchase arrangements included a veto position on building any refining capacity in Canada. Over the past three years China has had built more than 15 new VLCC (Very Large Crude Carrrier) tankers; Cosco's Dalien Operation now have 20
and constructed new and/or refurbished 20 refineries.
As China will be shipping their own product to their own refineries in their own tankers what possible reason could there be for China to pay a higher price for the product than the Americans currently pay? After all they own the production facilities as do the Americans.
Enbridge’s outgoing CEO Pat Daniels admitted China will even be allowed to bid
on the construction of the pipelines.
There is likely not a stitch of economic benefit for Canada or Canadians with this proposal to build this exclusive oil transportation system.
A real debate would include a discussion on how to build a transportation system for numerous world markets attracting new customers who might actually pay the world market price.
Today, however, every politician and every insider who understands the reality, those who continue to state this project is in Canada’s best economic interest are either incredibly stupid or bold faced liars. There is only one economic interest being served and it certainly is not Canada’s. A presentation on this topic to the Joint Review Panel September 2010The Future of Shipping Oil Begins With Awareness