TransCanada Corp. is promoting its Energy East pipeline project to Canadians with a promise that it will create thousands of jobs across the country and pour billions of dollars into government coffers.
On Tuesday, the company released a Deloitte & Touche LLP study on the economic impact of the $12-billion pipeline, which would bring about 1.1 million barrels a day of Western Canadian crude to refineries and export terminals in Quebec and New Brunswick. As part of its effort to woo those in the pipeline’s path, the TransCanada board met Tuesday in Fredericton – the day after an evening session with New Brunswick Premier David Alward.
TransCanada chief executive Russ Girling said the economic benefits will accrue right across the country, though the maximum job impact will occur during the three-year construction phase from 2016 to 2018, when it hits 7,729 full-time-equivalent positions each year.
“The project will help support thousands of jobs and millions of dollars in government tax revenues over the short- and long-term life of the project,” Mr. Girling said on a conference call.
“This project makes sense for all Canadians, and this new study helps us understand why that is the case,” Mr. Girling said.
The company has been widely accused by critics of inflating job-creation forecasts on its other major pipeline project, the Keystone XL line in the United States, which would ship crude from Alberta ’s oil sands to refineries on the U.S. Gulf Coast but is being held up by environmental concerns. U.S. President Barack Obama dismissed the expected jobs impact of the Keystone XL project as inconsequential.
Keith Stewart, climate campaigner for Greenpeace Canada, is equally dismissive of the Energy East jobs promise. “We would create more jobs and build a better economy if we spent $12-billion on public transit and greener vehicles that reduce our oil consumption, rather than on building a pipeline that fuels climate change by deepening the world's addiction to dirty oil,” he said.
Deloitte says the project would result in 7,729 direct jobs per year at the height of construction, but only 2,342 during development and 1,087 once the the pipeline is in operation. But Deloitte partner Trevor Nakka said it would also create indirect jobs among suppliers and spur the spending of wages and tax receipts, for a total of 23,498 during the construction phase.
Mr. Nakka noted that the forecast did not include factors such as higher revenues to oil producers that would result in increased investment, or any benefit to refiners from lowering their costs through access to low-cost western crude. While western producers are eager to reach new markets in order to get world prices for their crude, Mr. Girling said it is likely that North American crude will likely remain at least marginally less expensive than imports.
As well, Deloitte forecast that the project will boost tax revenue by $3-billion during the six-year development and construction phase, though there would be only a marginal impact once the pipeline is in service.
More than half of the construction-related jobs would be located in Quebec and New Brunswick, where the company will have to build a new pipeline. In Ontario and Western Canada, it will convert some portion of its natural gas mainline to carry crude oil.Report Typo/Error