The cancellation by U.S. President Joe Biden of the Keystone XL pipeline project on his first day in office should prompt Canada to end its dependence on one country for its petroleum product exports, says a new report by the Montreal Economic Institute, an independent public policy think tank.
The pipeline had been rejected by the Obama administration and then approved by the Trump administration.
The MEI’s latest Economic Note says: “The construction of new pipelines on Canadian soil would help the country reduce this risk and maximize revenues from oil exports, thus encouraging job creation and improving Canadians’ living standards.
“Some 98 percent of Canada’s oil exports go to our southern neighbours,” stated Miguel Ouellette, Director of Operations and Economist at the MEI. “Putting all of our eggs in the same basket is a risky strategy. The Keystone XL cancellation alone represents a loss of over $50 million a day in exports for Canada.
“Several world markets will experience substantial growth in oil demand by 2045,” he added. “Demand will surge by 130 percent in India, and by more than 40 percent in a number of other Asian countries. This is a golden opportunity for Canada.”
Ouellette said that in the last five years, “the federal government collected an average of $14 billion a year from the oil and gas industry.
“This tax revenue totals more than half of the sum of all provincial deficits during the pandemic,” he added, explaining that the Canadian energy sector “directly or indirectly employs over 830,000 workers, and accounts for around 10 percent of our GDP.”
Ouellette contended that new pipeline projects “compromise neither our safety nor the protection of our natural environment,” snd that “over 99.99 percent of the oil transported by federally regulated pipeline arrives safely every year.
“The construction of new Canadian pipelines would maximize the volume of fuels transported by the safest, greenest means, replace imports from other countries with oil from a Canadian industry that is responsible and ethical, and diversify our exports while generating billions of dollars a year which will help refill government coffers.”
Environmentalists and some Native American groups have opposed the project.
According to media reports, one opposition argument is that developing the Alberta oil sands makes fossil fuels readily available and will not stop the warming of the atmosphere.