Is Energy East back on track?

photo_10500371_the-high-pressure-pipeline

It will take more than the appointment of a New Brunswicker as a “temporary” member of the National Energy Board to persuade the more skeptical constituents of the chattering classes in this province that the Energy East pipeline project has again found traction.

Don Ferguson is, by every account, a capable and experienced guy. He was a deputy minister of health in the government of Shawn Graham. At the moment is the “chief strategy officer” at a University of New Brunswick think tank. He also co-owns a consulting firm in Fredericton.

All of which, and the fact that he’s bilingual, eminently qualifies him for the job on the NEB, which is expected (in some distant, sunny corners of the pundit-o-sphere where optimism grows like daisies in July) to reignite the regulatory process for Energy East. To which I snort: Don’t hold your breath.

For many reasons, in this country pipelines have become lightening rods for controversy and public outrage. Part of this is the result of the sometimes breathtaking arrogance of the companies and corporate stakeholders that support the oil and gas industry. Part of it has to do with bucket loads of misinformation about the relative safety of these overland structures. And part of it points to the ardency of the anti-fossil fuel movement across North America.

Still, here’s what we know: No society will ever progress to a sustainably green economy without the essential, if paradoxical, contribution of refined petrochemicals; and there’s no safer way of transporting crude to downstream facilities than by piping it.

As for Energy East, we know a few other things, thanks to an admittedly outdated, yet still relevant, economic benefits report by Deloitte & Touche in 2013, which stipulated “$10.0B and $25.3B in additional GDP for the Canadian economy during the six-year development and construction phase and the 40-year operations phase, respectively (note: while 40 years was used as the time horizon for the purpose of this economic analysis, regular maintenance is expected to extend the life of the pipeline significantly beyond 40 years). This economic activity will occur within Ontario (37% of total), Alberta (22%), Quebec (18%), New Brunswick (8%), Saskatchewan (7%), and Manitoba (5%).”

It also predicted “2,341 additional annual direct full-time equivalent (FTE) jobs during the 2013-2015 development period (7,118 annual FTE jobs total for three years including direct, indirect and induced impacts) and 7,728 additional annual direct FTE jobs during the 2016-2018 construction period (23,498 annual FTE jobs total for three years including direct, indirect and induced impacts), or a total of 91,849 one-year FTE jobs over the entire period, primarily within the construction and engineering industries in Quebec (31%), Ontario (26%), Alberta (16%), New Brunswick (12%), Saskatchewan (6%), and Manitoba (4%).”

Meanwhile, the report estimated between “$3.0B and $7.2B in total additional tax revenue for federal, provincial and municipal governments during the six year development and construction and 40 year operations phases, respectively. Considering both phases, this revenue is primarily generated in Ontario (36%), Alberta (21%), Quebec (20%), Saskatchewan (8%), New Brunswick (7%) and Manitoba (6%).”

Finally, and most pertinently for this province, Energy East would provide a “supply of domestic crude oil sources for eastern refineries, which is expected to result in an annual feedstock cost savings of between $1.55 and $11.49 per barrel based on current refining configurations and the refinery location.”

Times change, of course, and so do commodity prices. But the argument for Energy East is still sound. One can only hope that the NEB’s new members – temporary or otherwise – will find it a compelling one.

Tagged , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: