Canada must rethink the value of shipping oil south

The new Keystone XL pipeline project threatens our environment, our job opportunities, and our energy security, so why isn't Canada taking the issue seriously?

The battle to stop the Keystone XL pipeline is being fought on three fronts - in defence of the environment, in defence of jobs, and in defence of Canada's own energy security.

The 9,600-kilometre pipeline is designed to take black bitumen from the Canadian bitumen sands (oilsands) and ship it due south to planned refineries on the Gulf of Mexico.

So far, as more Canadians and Americans wake up to the environmental challenges of our oil economy, the bitumen sands' carbon footprint is making most of the headlines. Canada will not be able to meet its 2020 greenhouse gas emission targets unless we control the growth of bitumen sands. If the Keystone XL pipeline is approved and starts transporting one million barrels of black bitumen per day, it will no longer be possible for us to control that growth.

But the project has other negative implications that are not getting the same exposure. For example, many Canadians remain blissfully unaware that, despite having plenty of oil right now, our country could experience real shortages if it were to ship huge quantities to the U.S. Furthermore, taking raw, unprocessed bitumen from Canada and sending it to spanking new oil refineries in the U.S. is the equivalent of shipping millions of raw logs to a place where others can cut the two-by-fours and create the wood furniture. Like in forestry, the best jobs are in processing. If we ship our raw bitumen off to the U.S., the Americans will get the good jobs and we will be left with the massive mess left behind by the bitumen sands.

The first Keystone, built by TransCanada Corp., cost Canada thousands of jobs. An analysis by the Informetrica think tank demonstrated that besides exporting 400,000 barrels of heavy crude per day, the Keystone also shipped out 18,000 high-paying Canadian jobs.

The new project, Keystone XL, is twice the size of TransCanada's first Keystone. The proposed pipeline will shoot out 900,000 barrels of heavy crude in a one-way ride to the U.S. Canada is expected to lose more than double the 18,000 jobs that are already gone.

The Conservative government has ignored our argument that the export of raw bitumen also exports thousands of jobs to the U.S. However, when seeking support for the project last December, Natural Resources Minister Christian Paradis told a conference of American businessmen that the pipeline would create 342,000 jobs in the U.S.

In our appeal of the National Energy Board decision to greenlight the project, the Canadian Energy and Paperworks union (CEP) - which has some 35,000 members in the oil industry - presented a compelling case. The union argued that it is in Canada's best interest to stop Keystone XL, keep the good jobs at home, and safeguard our energy needs.

To do that we need to process the oil in Canada, using various upgrader and refinery projects in both Alberta and Ontario. This requires that we develop an infrastructure to connect eastern Canada to the supply of oil in the west.

Creating a pipeline located entirely in Canada would also restructure the way oil and gas are being delivered on this continent. Right now, oil travels thousands of kilometres south of the border before it re-enters our country around Sarnia. This means that most of Canada remains vulnerable to off-shore oil supply disruptions. It's worth noting, too, that we are virtually alone among oil-producing nations in not having the means to supply our own needs.

Canada is locked into a staggeringly lopsided deal with the U.S. under the North American Free Trade Agreement (NAFTA). The deal stipulates that Canada can never cut back on the volume of oil that it ships south. No matter how desperate our needs might become, we are trumped by Brian Mulroney's gift that keeps on giving - to his American friends.

Despite our arguments, it came as no surprise when the board swept aside our case and rubber-stamped the construction of Keystone XL. That's because there is a cozy connection between the oil lobby and the Conservative government. Many board members come straight from the energy sector, and for the past several years the board has said yes to every major export pipeline project put before it.

The Keystone XL project is stalled right now because the State Department and the Environmental Protection Agency in the U.S. seem to be listening to the environmental argument. U.S. regulators have asked for a delay while they take a closer look at the project. And they are asking exactly the right questions about whether the Keystone XL pipeline is in the best interests of the U.S.

But is anyone other than the labour movement raising the issues of jobs and energy security for Canadians? The Keystone XL pipeline is not in our best interests either.

It's time for Canadian political leaders to get some backbone., Tues Feb 15 2011
By Dave Coles

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