Pipeline not good long-term solution

The yellow-vest protests in Alberta and Saskatchewan show frustration with the lack of action to address the negative economic impact of low oil prices. However, their assertion that expansion of the Transmountain pipeline is a solution seems based on faulty information.

The Alberta government’s ad that there is no pipeline to get Alberta diluted bitumen (dilbit) to west coast tidewater is untrue. The existing 300,000 barrel per day (bpd) pipeline goes from Edmonton to Burnaby, B.C. It carries more than 150,000 bpd of dilbit.

However, this is diverted, near Abbotsford, B.C. to refineries in Washington. The majority of the remaining oil is shipped from Burnaby to American refineries.

Asia in general and China specifically have shown no interest in importing any Canadian oil at a premium price. They have no capacity refine dilbit. Also, China has access to high-quality, deeply discounted, oil from Iran and Russia.

Promoting the expansion of a pipeline to carry an additional 590,000 bpd will require massive expansions in the bitumen deposits. This will create short-term employment opportunities for a few people. However, in the long term, with no foreseeable demand for dilbit by China, people will be back, economically, where they are now. Dilbit will continue to be sold to the U.S. at discount prices. With greater supply the price is likely to go lower.

While Saskatchewan and Alberta have significant oil related economic problems, there is no evidence that building a pipeline is a longterm economic solution. However, it will be a longterm economic liability. Murray Hidlebaugh, Saskatoon