For starters, that Canada, and even Albertawhere the heavy crude oil that will feed those pipelines is minedhas relatively little to gain from projects such the Enbridge Northern Gateway and Kinder Morgan Trans Mountain pipelines.
Another point that might surprise many: according to Allan, the development of the Athabasca oil sands (also called tar sands) could actually increase Canadas dependence on questionable trade partners in the Middle East.
The economic case that has been presented is one of glowing support, she told the Straight in a telephone interview. That perspective is biased, it misrepresents the fact, and, in some cases, its bogus.
Allan, an expert witness at the Northern Gateway hearings, will present those arguments (among others) and the economics behind them at a forum in Burnaby scheduled for tomorrow (March 27).
Ahead of the event, she discussed the alleged misconceptions described above.
First, that oil sands bitumenthe technical term for the heavy crude Alberta wants to export through B.C. portsis a boon for the countrys economy too great to miss.
Allan suggested that if the priority of oil sands development is to strengthen the economy, there are better ways to go about it.
The oil sector in Alberta primarily plans to extract bitumen from the oil sands and export it rawdiluted with imported condensateto other countries, she explained, where they will do the upgrading and refining, and where they capture the real economic wealth from the product.
According to Allan, if the goal was to strengthen Canadas economy, bitumen would be upgraded at facilities in Alberta (creating jobs and adding value to the petroleum product), and then moved east where there is a domestic demand in Ontario and Quebec.
Eastern Canada needs about 775,000 barrels of oil a day and there is not enough oil to go around, she said. We cannot meet the energy security needs of Asia at the same time as meeting our own.
A second claim that Allan challenged is that the development of the oil sands is about minimizing dependence on oil-rich nations with questionable records on human rights.
Allan explained that because much of Athabasca bitumen is slated for export, eastern Canada will have to continue to import oil from foreign sources.
She also called attention to the issue of condensate, a mixture of hydrocarbons that the industry uses to dilute bitumen to a point where it is light enough to flow through pipelines.
Canada does not have enough condensate to meet the oil sand’s needs, Allan noted, which is why the Northern Gateway proposal is for a twin pipeline. Diluted bitumen will flow west from Alberta, and condensate will move east from B.C. ports.
Where will that condensate come from? The same trade partners in the Middle East that oil sands advocates argue they are helping buyers move away from, Allan emphasized.
Well have a situation where were importing oil in eastern Canada, she said, and where were importing condensate, increasingly from the Middle East, in western Canada.
The only long-term benefactors will be a handful of multinational corporations and national oil companies owned by foreign governments, Allan added.
These pipelines should not be built, she said. There is no economic benefit.
Allans presentation, The Economics of Oil Pipelines and Tankers, is scheduled for 6:30 p.m. on Wednesday (March 27) at Confederation Centre (4585 Albert Street) in Burnaby.
You can follow Travis Lupick on Twitter at twitter.com/tlupick.