January 14, 2014 - 9:45 AM
Back in a mid November report I asked for input on the subject of pipelines. To my surprise, the amount of feedback I received was not as a strong as I was hoping for. What was not surprising is the comments I did hear back were quite divided with some strongly opposed to all pipelines and others in support of some pipelines and not others while some strongly support all pipelines. The pipeline discussion is an important one as alternative petroleum transport solutions such as rail also carry risks that provoke important discussions on how Canada can best meet our future energy needs. One part of this discussion that has been largely absent is the question why Canada is currently in this situation.
One truth that we as Canadians must face is that per capita Canada is one of the greatest consumers of transportation fuels world-wide. This is not a surprise given that we are a large and vast country. Even many of those who come to protest pipelines in front of my office often drive long distances to do so. By the numbers Canada has close to one million kilometres of roads and we see over one million flights per year in the air. Ambulances, fire trucks and other first responder vehicles all use fuel. Many of our largest private sector employers depend upon the movement of goods, commodities and workers to survive. In fact one semi-truck will cross the border on average every two seconds moving roughly $2 billion worth of goods on a daily basis. This all adds up to roughly 110 million litres of gasoline and an additional 50 million litres of diesel – used not every month nor every week but every day in our various forms of petroleum powered transportation.
When you combine Canadian gasoline and diesel fuel consumption in an average day that amounts to 160 million litres and at times this number increases to 200 million litres a day. Alternatives? Biofuel offers lower emissions but also lower energy density meaning more biofuel is required to cover the same distance as conventional gasoline. Natural Gas is another alternative that is currently strongly supported by the BC Provincial Government. Although there is a higher upfront cost and a lack of infrastructure it is cleaner burning and offers potential. Electricity including hybrids has been on the market in Canada for close to 15 years. In spite of a growing selection of hybrid models of the 1.6 million vehicles sold in 2012 less then 1% were hybrids as many consumers are reluctant to embrace this platform. In many respects this leaves technology and vehicles that burn less gasoline or diesel but do so in a more emissions efficient manner. For example a 2005 or newer vehicle will produce 90% less smog then a vehicle from 1993 or older. These transportation trends point to a continued need for a significant daily supply of oil and gas to meet our energy needs.
When looking at these same transportation demands the question of supply and the need to move our supply around Canada safely becomes a key concern. Currently Canada has the third largest oil reserve worldwide- however this is only true if the oil sands are included. While some suggest the oil sands should be shut down it must be pointed out shutting down the oil sands would create a loss of 97% of Canada’s oil reserve. This would seriously impact the security of our petroleum supply and more so in Western Canada as we consume more crude oil per day then other regions in Canada. Currently there are 18 major refineries across Canada producing slightly in excess of 300 million litres of refined petroleum products every day. These same refineries employ a total of 17,500 Canadians and contribute $2.5 billion to our GDP annually. Due to the fact that Canada’s existing pipeline infrastructure is either at capacity in some regions or nonexistent in others this results in some areas of Canada exporting petroleum while others import gasoline from outside of Canada. Ultimately Canada is a net exporter of oil.
Currently there are over 12,000 gas stations in Canada with higher volume locations pumping upwards of 10 million litres of fuel per year primarily for automotive use. This does not include oil used for propane/butane, asphalt, aviation fuel, motor oil, and other uses. Transportation as an industry currently makes up over 6% of Canada’s overall economic output. To some this week’s report may sound like a promotion of the Oil Sands. That is not the intent. I believe it is important to have an overview and an understanding on the fact that as Canadians the reality is the use of petroleum is a significant part of our everyday lives. Given our current consumption rates and the fact that 97% of our oil reserves are in the oil sands the importance of how we develop and safely transport our future energy needs are critically important questions that we as Canadians must face. This is an important discussion and one I continue to welcome your input on. I can be reached at email@example.com or toll free at 1-800-665-8711
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