Could Northern Gateway oil pipeline give us Saudi Albertia?

FORMER CIBC ECONOMIST Jeff Rubin always looks at the big picture.

When he says that a review panel’s endorsement Thursday (December 19) of Enbridge Inc.’s Northern Gateway oil pipeline is an “important victory” for Prime Minister Stephen Harper, he puts it into a broad perspective.

“For Stephen Harper to fulfill his dream of the country becoming an energy superpower, we’re going to need four or five pipelines like this,” Rubin told the Straight by phone from Toronto.

As Rubin notes in this year’s updated version of his 2012 book The End of Growth, Alberta’s daily oil production of about 1.9 million barrels is projected to double by 2020, reaching five million barrels in 2030.

Combined with other sources, Rubin writes, this projected 2030 production will push Canada’s daily production to about six million barrels, up there with Saudi Arabia and Russia.

Rubin indicated to the Straight that this increased production will require, at the very least: Northern Gateway, with its daily capacity of 525,000 barrels; Kinder Morgan’s planned twinning of its Alberta to B.C. pipeline (890,000 barrels); TransCanada’s Keystone XL pipeline from Alberta to the U.S. (830,000 barrels); TransCanada’s proposed Energy East pipeline from Alberta and Saskatchewan to Eastern Canada (1.1 million); and Enbridge’s planned reversal of its Line 9 pipeline in Canada (240,000).

However, Rubin said he doesn’t expect all this pipeline capacity to be built amid public opposition.

“To use the parlance of my former business, I’d short that trade,” Rubin said. “The chances of that happening are worth betting against.”

In The End of Growth, Rubin also notes that demand in the U.S., which buys about two-thirds of Canada’s oil, is down.

Even China, the intended market for oil from Northern Gateway and Kinder Morgan’s twinned pipeline, is not a sure bet.

“If China’s economy stops growing at its current clip,” Rubin writes, “maybe it won’t need to import oil from the tar sands.”

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