Alberta's evidence contains multi-billion-dollar inflation of Northern Gateway benefits
Government consultant admits upgrading would solve market access problem
Edmonton - The Alberta Federation of Labour has identified a multi-billion-dollar error in the Government of Alberta evidence, showing the government's consultants are massively overstating the benefits of the pipeline to producers.
While the Government of Alberta analysis shows $8 billion/year impact if we do not have Northern Gateway access to Asian markets. That figure has been widely cited (see below). Under cross-examination, the government's consultant indicated the $8 billion-dollar impact was only for one year, not every year.
"Canadian producers not having sufficient access to premium heavy crude refining markets could lose about US $8 a barrel for every Canadian heavy crude barrel, with a revenue impact averaging $8 billion per year from 2017 to 2025," said the report, completed for the province by Wood Mackenzie.
Under cross-examination, the Government of Alberta consultant conceded to AFL counsel that pacing development and upgrading bitumen to synthetic crude oil – creating thousands of jobs – would also alleviate the problem of "market access," but that these alternatives were not explored in his report.
"The bottom line is Alberta is selling the wrong product," says Gil McGowan, President of the Alberta Federation of Labour.
"The glut of bitumen on the market is a result of bitumen looking for appropriate refineries. If the product was SCO, we could be selling the product to any refinery in North America."
Canadian Press, Dean Bennett, September 4, 2012.
MEDIA CONTACT: Gil McGowan, President Alberta Federation of Labour at 780-218-9888 (cell) or 780-483-3021 (office)