Quebec would barely benefit from moving oilsands crude through province: report

MONTREAL—A newly released report by environmental groups says proposals to pipe western Canadian crude to Quebec refineries would deliver negligible economic benefits to the province in exchange for heightened ecological risk.

The study, prepared for Greenpeace Canada and Equiterre, said job creation and spinoffs from several active pipeline-and-processing proposals would be insignificant to Quebec’s overall economy.

Brigid Rowan, the report’s co-author and a Greenpeace board member, said a pipeline accident could cost lives and put taxpayers on the hook for billions of dollars in recovery costs, particularly if a spill takes place in an urban area like Toronto or Montreal.

“(The risks) are assumed by Quebec citizens and not by the developers,” Rowan, an economist, told a news conference in Montreal.

Results of the analysis, conducted by California-based consulting firm The Goodman Group Ltd., were released as oilsands producers in Western Canada search for new ways to transport their crude to markets.

The study examined possible economic advantages of the Energy East pipeline project by TransCanada Corp., a plan by Suncor Energy Inc. to enable its Montreal refinery to process thick oilsands bitumen and the Line 9 reversal by Enbridge Inc.

Rowan argued that even if all of these projects moved forward, the benefits for Quebec’s already small oil sector would be “minuscule.”

The report, dated in January but only made public this week, says the overall contribution of the oil sector amounts to about 0.5 per cent of the province’s economy and 0.3 per cent of Quebec’s jobs.

It attributed its findings to data provided by Statistics Canada and proponents of the various projects.

Any small economic benefits, Rowan said, would be felt during the short-term, development phase.

She said the projects would generate few long-term jobs in the province.

In reaction to the study, a spokesperson for TransCanada said its authors minimize the impact of billions of dollars in investments.

“When you invest $3.2 billion to build something in the province of Quebec and invest $125 million to operate it annually for decades, it only makes sense that Quebecers will benefit from jobs and taxes generated,” Shawn Howard wrote in an email.

“These groups marginalize the contribution of the refining industry in Quebec by typifying the employment in that industry as minimal. If Quebec refineries closed, that would mean the loss of thousands of jobs and those impacts are real for the people who choose to work in this field.”

A study commissioned by TransCanada and released last year predicted Energy East’s development and construction phase would produce the equivalent of 10,071 direct full-time jobs across Canada until 2018.

The report, conducted by Deloitte & Touche LLP, said 1,081 direct jobs would be created once the pipeline is up and running.

Earlier this year, the National Energy Board (NEB) approved Enbridge’s controversial plan to reverse the flow and increase the capacity of Line 9, a project that would transport crude eastward to refineries in Ontario and Montreal.

The board said its decision would allow Enbridge to “react to market forces and provide benefits to Canadians, while at the same time implementing the project in a safe and environmentally sensitive manner.”

Opponents of the Line 9 project often highlight Enbridge’s 2010 spill in Michigan, where 20,000 barrels of crude leaked into the Kalamazoo River.

The federal government welcomed the Line 9 decision, saying the project would protect high-quality refining jobs in Quebec, open new markets for oil producers in Western Canada and replace more-expensive foreign crude.

The Goodman study, meanwhile, said while refiners would likely benefit from the lower-priced crude, the savings probably wouldn’t be passed on to consumers at the pump.

It recommended that instead of partnering with oilsands-related projects Quebec should focus on creating jobs by developing its green energy industry.

“Quebec should continue to move towards cleaner energy by increasing investments in renewables, energy efficiency and public transportation,” said the report, titled Economics of Transporting and Processing Tar Sands Crudes in Quebec.

“They would allow Quebec to reap more significant and longer-lasting economic-development benefits.”