Gas prices are just ridiculous
July 4th, 2014 - 3:36pm
It is fitting that gas prices jumped considerably at the same time as the Harper government gave a conditional green light to the Northern Gateway pipeline project. Those two events highlight just how far off course our oil and gas policies have strayed from consumer need in Canada. At the same time as we are green lighting a project that is practically guaranteed to create environmental catastrophes, we are being held hostage by political events out of our control in Iraq. The fact that domestic oil production does virtually nothing to buffer the effects of international speculation on oil production should leave Canadian tax payers in a blind rage.
The truth is that we are getting very little in return for our considerable investment – by way of tax breaks and handouts – to the profitable oil and gas sector. For all the money we throw in, we are always an incident away from higher gas prices. And it doesn’t have to be an international problem either. A refinery fire last winter crippled diesel production in Canada and sent prices on that critical transport sector fuel through the roof. When transport costs go up so do prices on consumer goods and, despite all our oil reserves and production, our refinery capacity is still balanced on a knife’s edge.
Gas prices too are a constant source of aggravation and increasingly the exorbitant prices are not confined to rural and northern locations. That fact can be hammered home by simply driving from Elliot Lake to Ottawa and watching the prices fluctuate along the way. What sticks out the most is the price in Sturgeon Falls which is always the cheapest along the route. Once one enters the Ottawa valley the prices rise and are higher in Ottawa than one would expect. As I write this the cheapest gas price in the entire province is in Thunder Bay which shows how the cost of transport doesn’t have everything to do with setting the rate. Consumers have every right to be mad and they most certainly are.
If gas prices aren’t enough to set you off, the potential for environmental catastrophes from the Northern Gateway pipeline should be. Pipelines leak and oil companies usually do a less than thorough job of cleaning those up. Enbridge still hasn’t finished cleaning up the Kalamazoo River spill that happened four years ago and took place in relatively accessible Great Lakes Basin geography. The Northern Gateway will flow through some of the most challenging and inaccessible mountainous geography in North America and will terminate in a port that requires tankers to snake their way through an estuary rich in biodiversity and opportunities for a ship to ground out and spill oil.
Canada would be taking all the risk in the project while Asia would be getting all the oil along with all the value added jobs associated with refining bitumen. Add to that the fact that so much of the Canadian production is foreign owned and the benefits are significantly smaller than the Conservatives claim. For consumers there is no break at all and no protection against market instability. It’s no wonder the government’s support was announced on a Friday afternoon – that is considered the dead zone for news which is exactly where they want the real story to be.