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Oil sands development and broader energy issues facing Canada have been keeping these folks and their spreadsheets humming over the past couple of years. The output has been a steady stream of economic analysis, rife with weighty facts and figures.
In recent weeks, for example, several published reports explore Canada’s inability to capture maximum value for its exported crude oil and quantify the economic costs.
Billions at stake
According to investment bank Nomura, the $50 a-barrel differential (observed in mid-December 2012) between the internationally-priced Brent crude Canada imports and the Western Canadian Select crude we export is costing the country around $2.5 billion every month.
The Canadian Energy Research Institute (CERI) estimated in a 2012 report that Canada would lose as much as $1.3 trillion of gross domestic product (GDP) and $276 billion in taxes from 2011 to 2035 if the existing pipeline expansion projects don’t get built.
In reports published last year and in 2011, the analysis focused on oil sands development and the potential economic value of pursuing additional projects. The Conference Board of Canada noted that Canada has already spent $100 billion on oil sands development, with hundreds of billions more expected over the next 25 years. In a study released May 2011, CERI suggested the value of new projects from 2010 through 2035 would include:
- $2,077 billion in investments, reinvestments and revenue from new oil sands projects;
- $2,106 billion toward Canada’s GDP;
- 905,000 jobs in 2035, up from 75,000 at present.
One common feature of this analysis is big dollar amounts - so big that even Major League Baseball salaries are chump change in comparison. With the power to shock and awe, these financial figures are being highlighted by industry (including Suncor), politicians, investors and others seeking to win over support for new pipelines and more oil sands development.
Not all about the bottom line
While money may talk for many, it doesn’t talk for all. And that’s a good thing! After all, humans are complex creatures, driven by beliefs, values and emotions that transcend the bottom line. How else do you explain why we freely volunteer our time to community and environmental causes we hold dear? Or why we pay a month’s salary for a designer purse when a grocery bag would do the job? Or why some choose to forgo investment in education, lucrative careers and economic opportunity to sell batik shirts on a beautiful tropical beach?
Accounting for other perspectives
Suncor and other energy companies know it’s not all about the dollars and consider other perspectives in the course of doing business. Suncor, for example, pursues a “triple bottom line vision” of sustainable development, which maintains that energy development should occur in a way that provides economic prosperity, promotes social well-being and preserves a healthy environment.
Through its stakeholder relations policy, Suncor is committed to collaboration, transparency and respect for all views. And as part of its environmental stewardship efforts, the company has adopted strategic, beyond-compliance environmental performance goals.
The economic case for new pipelines and oil sands development is a compelling one that’s difficult to refute. Economic analysis alone, however, shouldn’t trump consideration of other perspectives as we grapple with our energy future.
