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Will new oil pipelines benefit BC
businesses?
Credible Conversations Forum
May 29, 2013
#credconvo
@CredBC
BC economic snapshot:
Where’s the wealth? GDP breakdown
Goods
24%
Services
76%
Source: The British Columbia Economic Accounts, BC Stats
BC economic snapshot:
Where’s the wealth? GDP breakdown
Other services
Agriculture, forestry,
fishing + hunting
Public
administration
Mining, oil, gas + energy serv
Utilities
Construction
Financial + real estate
Manufacturing
Technology, cultural +
ICT
Transportation
Source: The British Columbia Economic Accounts, BC Stats
Trade
BC economic snapshot:
Where are the jobs?
Agriculture,
forestry, fishing +
hunting
Mining, oil + gas
Manufacturing
Construction
Utilities
Transportation
Other services
Trade
Financial +
real estate
Public
administration
Source: 2012 British Columbia Financial and Economic Review
BC economic snapshot:
Where is the investment?
Agriculture, forestry,
fishing + hunting
Housing
Mining, quarrying +
oil wells
Manufacturing
Construction
Other services
Utilities
Public
administration
Financial
+ real
estate
Trade
Source: 2012 British Columbia Financial and Economic Review
Transportation +
warehousing
BC economic snapshot:
Future trends
Where will future growth come from?
• Emerging tech sector
• The green economy
• LNG plans for northern BC – provincial priority
Source: KPMG 2012 BC Technology Report Card
BC economic snapshot:
Technology
The technology and digital sector:
• Employs 80,000+ people– more than forestry, mining, and oil & gas
combined
• Is the second fastest creator of new private sector jobs
• Contributes more to BC’s GDP than any resource-based sector
• Grew 5.7% annually from 2001-2009 & now represents 10% of BC’s
exports
• Is underperforming compared to other provinces
• Tremendous opportunity for growth
Source: KPMG 2012 BC Technology Report Card
BC economic snapshot:
Technology
Source: KPMG 2012 BC Technology Report Card
BC economic snapshot:
Green economy
Green jobs:
• Clean energy supply & storage, clean transportation, green
building and energy efficiency
• Together responsible for 123,000 jobs and $15b GDP in 2011
• Public policies and programs have supported recent growth
• The sector is still new and vulnerable to risk – barriers include
trouble finding skilled workers and investment capital
Source: Globe Advisors BC’s Clean Economy reports
Assessing the risks of new pipelines
Why focus on
economic risk?
How would this project impact the west coast’s
economy?
• How many jobs would the pipeline create?
• How many jobs would be risked in the case of an oil spill?
• What would the indirect employment benefits be?
• Would the pipeline help BC fund new social programs?
• How much would an oil spill or leak cost to clean up?
Assessing the risks of new pipelines
Impact on jobs
• Major tanker spill on BC’s north coast could lead to 43% job
losses in coastal industries (UBC study)
• A major spill along the Washington State coast could
adversely affect 165,000 jobs (Gov’t study)
• Need for modeling the impact of a south coast spill on jobs
here – direct impacts on industries like tourism and real
estate, but also indirect effects to sectors benefitting from
Vancouver’s brand
Sources: UBC Fisheries Economics Research Unity, Washington State
Department of Ecology
Assessing the risks of new pipelines
Impact on tourism – Gulf of Mexico case study
• Deepwater Horizon spill could mean 22,000 job losses and $8.7b
economic impact
• Perception overshadowed direct impacts
• Seafood industry particularly impacted by perceptions
• Net negative impact on hospitality industry
• Small businesses were hardest hit
Source: Canadian Journal of Fisheries and Aquatic Sciences, CRED real
estate impacts fact sheet (forthcoming)
Assessing the risks of new pipelines
Impact on real estate
• Impacts of pipelines on property values are well established:
CRED’s review of 8 separate North American spills confirms
this
• Following an oil spill, values of nearby properties affected on
average 5-8% for around 1-2 years
• Directly affected properties usually see 10-45% loss in value
• Reputation alone is enough to have a noticeable impact
• More information is needed on the impact of Burnaby 2007
spill
Source:
CRED real estate impacts fact sheet (forthcoming)
Assessing the risks of new pipelines
How much would an oil spill cost?
• Historical spills
• Exxon Valdez $6.3b
• Deepwater Horizon $41.6b and counting
• Liability capped at $1.34b for spill at in Burrard Inlet or at sea
• High risk that costs above $1.34b will fall to taxpayers
• Need more info on who pays for a spill along the pipeline
route
Sources: UVic Environmental Law Centre, BC Government Technical
Analysis on Conditions Required to Support Heavy Oil Pipelines
Questions for BC residents
• What can impacts in other places tell us about the risks for the west
coast?
• What is the likelihood of a major spill at sea or along the route?
• Do the risks outweigh the benefits?
• If they do, should we accept the risks anyway for the benefit of the
Canadian economy as a whole?
• If we don’t want to accept the risks, what are the economic
alternatives?
Will new oil pipelines benefit BC
businesses?
Credible Conversations Forum
May 29, 2013
#credconvo
@CredBC