The great pipeline debate: Is it good for the economy?
Kinder Morgan, the Texas-based company whose Canadian division owns and operates the pipeline, said that nearly all the oil produced in Western Canada currently gets sold to the United States at a discount to the world price for similar products.
“The simple truth is that Canada’s oil will fetch a better price if we give ourselves the option of shipping more of it via Trans Mountain’s Pacific tidewater terminal in Burrard Inlet,” the company said in a statement.
A document posted on the project’s website adds: “Twinning the Trans Mountain pipeline will increase the value of Canadian oil by unlocking access to world markets where higher prices are paid for oil, resulting in greater tax revenue for Canada.”
Not everyone agrees. David Hughes, an earth scientist who spent 32 years with the Geological Survey of Canada, said industry and government officials are relying on faulty assumptions.
Historically, he said, there has been little difference between international and North American oil prices and, once transportation costs to Asia get factored into the equation, any price advantage disappears.
If anything, Hughes said, the transportation costs to Asia mean Canada is likely to get a lower price for heavy oil in overseas markets.
“The whole Asia price-premium argument is false,” he said.
The great pipeline debate: Is it good for the economy?
Kinder Morgan, the Texas-based company whose Canadian division owns and operates the pipeline, said that nearly all the oil produced in Western Canada currently gets sold to the United States at a discount to the world price for similar products.
“The simple truth is that Canada’s oil will fetch a better price if we give ourselves the option of shipping more of it via Trans Mountain’s Pacific tidewater terminal in Burrard Inlet,” the company said in a statement.
A document posted on the project’s website adds: “Twinning the Trans Mountain pipeline will increase the value of Canadian oil by unlocking access to world markets where higher prices are paid for oil, resulting in greater tax revenue for Canada.”
Not everyone agrees. David Hughes, an earth scientist who spent 32 years with the Geological Survey of Canada, said industry and government officials are relying on faulty assumptions.
Historically, he said, there has been little difference between international and North American oil prices and, once transportation costs to Asia get factored into the equation, any price advantage disappears.
If anything, Hughes said, the transportation costs to Asia mean Canada is likely to get a lower price for heavy oil in overseas markets.
“The whole Asia price-premium argument is false,” he said.
The great pipeline debate: Is it good for the economy?
