NationalOpinion

Alberta needs more pipelines and we need them now

If we want to develop green energy and avoid economic disaster, Alberta needs to invest in oil and gas infrastructure

Alberta is on a dangerous track towards a financial disaster. If we fail to build pipelines soon, we not only ensure that financial disaster, but also kiss our dreams of green energy goodbye.

Earlier in November, University of Calgary economist Trevor Tombe published a paper predicting that Alberta is on track for a $40 billion deficit by 2040. This is largely a result of government overspending and an ageing baby boomer generation who are progressively paying less in taxes and requiring more healthcare as they enter retirement.

Right now, the Alberta government is in no position to cover these costs due to extremely low oil prices. At present, the Canadian economy is losing $80 million dollars a day due to oil price differentials with the US. This is because Canada only has the infrastructure to sell oil to the United States, who are currently a lot less dependent on Canadian oil than they have been in the past. Decreased demand means we’re forced to sell at lower prices, hence the economic loss.

With the decreasing value of Canadian oil, oil companies are moving their operations to the US or getting bought up by US companies. We’re losing one of our most valuable sources of corporate resource revenue, and it’s going to be really hard, if not impossible, to get them back.

This is where pipelines come in. Alberta, which produces just over 80 per cent of Canada’s crude oil, needs to be able to move its oil to the coast so we can elicit more competitive prices from overseas markets like China.  Such a move would mean gaining back those 80 million lost dollars and bringing in much-needed government revenue.

While tax hikes or a provincial sales tax may help mitigate our increasing debt, they’re only a short-term fix. We need to focus on increasing the province’s revenue in the long run, rather than further shaking down Alberta’s residents, many of whom are unemployed due to low oil prices.

Building pipelines, however, is a whole political ordeal. There aren’t only economic concerns to consider, but environmental concerns as well. In a world struggling with climate change, many people oppose the continued use of oil and the development of the petroleum industry. Building pipelines seems counterintuitive to our goals of a greener planet.

I’m fully aware of the environmental damage that petroleum products cause, as well as their unsustainability as a resource,  but the reality is that we don’t have any other options right now. Green energy is nowhere where it needs to be to support the Canadian economy and Canada’s energy needs. We can’t switch from oil to green energy overnight; we can only continue to develop green energy so it can gradually replace our dependence on oil.

But still, many are anxious to phase out oil immediately. Climate reports from the UN and other organizations emphasize the imminent danger of not changing to eco-friendly energy sources. While we should have concern for our planet’s future, we must consider that without sufficient royalties from the oil and gas sector, developing green energy in Alberta is going to be extremely difficult. When oil and gas takes a hit, everyone in Alberta (and Canada, for that matter) takes a hit; you can’t develop new technology without sufficient financial resources.

More pipelines don’t necessarily mean we’d be producing any more oil; we’d just be able to gain more revenue from oil we’re already producing. Pipelines are also extremely safe and efficient. Leaks are exceptionally rare, and when they do occur, most are quite small, occurring in facilities rather than on the actual line

If you haven’t seen the desperate need for pipelines quite yet, consider how negatively an economic disaster and low government revenue would affect the University of Alberta. Post-secondary education has a lower priority than other government initiatives like health care, so when the coffers dry up, you can full well expect us to lose some government funding, which makes up 52 per cent of the university’s yearly revenue.

This would have a three-fold effect on the university. Firstly, there would be an inevitable decrease in enrolment, as tuition may need to rise and the university may need to restrict entry due to financial constraint. That’s less educated people who can help solve our future and present economic and environmental problems. We’ll also likely suffer from decreased research funding, impacting our crucial endeavour of developing alternative energy sources. Finally (and probably most concerning), you can expect finding a job in a debt-ridden Alberta to be extremely difficult.

We can either build pipelines and increase oil revenue, allowing for new green technology development, or spiral down into an economic recession and fail to produce green energy. It should be clear what the right path is.

Related Articles