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Rubin Rips Economic Arguments for Trans Mountain Pipeline

admarkt / Pixabay
admarkt / Pixabay

The much-touted economic benefits ascribed to the controversial Trans Mountain pipeline expansion won’t add up, even if the project opens the taps for Canadian diluted bitumen to flow to Asian markets, veteran economist Jeff Rubin argued late last week in a segment on CBC’s The Current.

“The reality is that Asian markets pay less, not more, for the bitumen that Canada wants to sell than U.S. refineries,” said Rubin, a senior fellow at the Centre for International Governance Innovation and former chief economist at CIBC World Markets. Noting that Mexican Maya Crude sells for $8 less in Asia than in the United States, he said the returns from shipping Alberta tar sands/oil sands product across the Pacific wouldn’t justify the cost of extracting it.

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And in the longer term, the viability of the project represents a bet that countries won’t implement the greenhouse gas emission controls in the Paris Agreement—or follow the path toward tighter GHG targets that will pull humanity toward a more realistic long-term limit on average global warming.

“There’s even less of a business case in the future than there is today,” Rubin told guest host Kelly Crowe. “Not if Canada and 170 other countries come even remotely close to living up to their pledge to hold global climate change to 1.5 to 2.0°C.” He compared building a new oil pipeline while trying to reduce carbon pollution to “having your foot on the brakes and the accelerator at the same time.” 

Rubin didn’t dispute Kinder Morgan Canada President Ian Anderson’s assertion that the pipeline would create “thousands of good-paying middle-class jobs for Canadians” while delivering tax revenues to all orders of government. “If in fact it’s built, I don’t deny that the construction of a new pipeline will be a short-term job creator,” he said. “But if that ends up being a stranded asset, that’s not going to be an engine of economic growth. That’s an albatross around the economy.”

In mid-2014, U.S. TV host Rachel Maddow reacted after Press Progress spotted Kinder Morgan’s claim in its 15,000-page submission to the National Energy Board that the Trans Mountain pipeline would create jobs, jobs, jobs—in oil spill response and clean-up.

“Turn that frown upside down, oil-soaked neighbourhood: you can get a job cleaning it up if you just have the right attitude,” Maddow wisecracked at the time. “We’ll make it worth your while. That is seriously what Kinder Morgan is arguing to the freaking Canadian government about why they should be allowed to triple the capacity of their pipeline.”

On the National Observer, meanwhile, community economic development specialist Wes Regan unpacks the notion that the project is in the national interest. “Riddle me this. How is a multinational corporation, headquartered in Houston, Texas and transporting diluted tar to China, in Canada’s national interest?” he asks.

“When we talk about the national interest we should be talking about Canadian people and our needs, not those of a foreign corporation exporting raw, unrefined, toxic gunk. A national poverty reduction plan would be in the national interest. So would a national housing strategy. A national mental health and addiction strategy with provinces, municipalities, and First Nations communities would be in the national interest. Not a pipeline for an American oil company.”