Economist Says If Enbridge Builds, You Pay More At The Pump
Thursday, October 4, 2012 @ 4:07 AM
Prince George, B.C. – Robyn Allan is not only a critic of the proposed Enbridge pipeline she also is an expert in the matter of insurance having served as the head of ICBC. Allan, who appeared before the hearings in Edmonton in September, has a solid background in economics and was considered an expert witness.
That gives Allan a lot of leave to be able to talk about the project in a "stand back and look at it all" perspective. She has done just that and what she sees is not what she suggests the people of BC should be contemplating for their future.
Allan says that two years ago Enbridge presented their case to the Canadian people as an opportunity to get higher oil prices in Asia. This we were told would contribute economic benefits to Canada.
What they didn’t tell us, according to Allan and what her research has shown, is that the price increases apply to every barrel produced and sold in Canada, every year for 30 years and these increases will be passed onto the Canadian consumers and businesses. Simply put if we get a better price from our oil, as a result of the pipeline, the drivers of Canada will pay the added cost at the pump.
Nowhere does Enbridge assess the cost to you and me or the Canadian economy when the price of oil goes up because the project is built. Instead, somehow this increase in price for the Canadian consumer is viewed by the Oil Industry as a benefit.
Allan sees an economy that would be impacted as higher oil prices are passed on and income is transferred to Albertans Oil companies from individuals, families, business and other sectors.
According to testimony at the Edmonton hearings Enbridge says that the Northern Gateway will increase the price of western Canadian crude oil, on every barrel, every year for about 30 years.
Enbridge submitted a CAPP 2011 growth forecast to the joint review panel in 2011 that forecast predicted a crude oil supply need will increase from 2.8 million barrels per day to 4.5 million barrels per day by 2020. But at its annual investor day meeting with shareholders the company said they believe the CAPP forecast was too aggressive. They told investors they expect growth of 4.4% not the 45% increase predicted by the CAPP.
So on one hand the company has in the past used one set of figures while another is presented for its internal planning purposes.
If you use the figures as presented and CAPP says 4.5 million barrels of crude will be needed by 2020 and Enbridge believes only 3.9 million barrels a day will be available, then the pipeline would not be needed for at least ten years because Northern Gateway is intended to ship 525,000 barrels a day.
That position, says Allan, shows that Enbridge has two stories about future supply, one that tells the shareholders and one it tells the Canadian public.
Tomorrow: is the claim of 3,000 jobs anywhere near valid?
Comments
That’s nice to know. Just can’t win with those thieving gas companys any excuse to take more money out of our pockets and put in to theirs. They don’t care if they are driving the cost of living right through the roof. Not just in gas prices but everything else delivered by truck.
How will one pipeline increase the price of a barrel of oil? That’s also a north american price, there is no price per barrel just for Canadians. There’s a lot of BS coming from this woman.
Although I have a dislike for the Enbridge Pipeline, scaring people with these numbers doesn’t sit well with me either.
Canada only produces 4% of the world’s oil so it has very little influence on the price.
There is only one tax payer. If we pay a little more at the pump, but we pay a lot less in taxes, so be it.
The fact is that diesel, gas, and so on, also trade at world prices. It’s not just oil. Don’t assume that cheap oil means cheaper gas. If the refineries can make a bigger spread, they’re happy to do that.
Look at it this way.
I produce a product and can ship it via an existing highway to the east to 5 towns.
They are willing to pay me $50 for my product.
Someone builds a new highway to the west. There are 10 towns there that are used to paying $60 for my type of products.
If I send products to the west instead of east, I can charge $58 for my product and some of those will buy from me since it is cheaper, but I gain because I get more than before.
Access to market makes all the difference in the world to producers.
Access to product makes all the difference in the world to consumers.
Scare tactics. The headline should also read “If Enbridge doesn’t build, you will also pay more at the pump.”
$138.9/ltr — did I have a little stroke? What year is it? How long has the Enbridge pipeline been pumping to the coast? Wish they would have built it to Vancouver. I have missed it all . She has come too late.
Itâs still price fixing and itâs illegal. The gas stations get a call that the price of gas is going to go up, they run out and reset the price on the pump for product that they have already purchased and is sitting in there tanks. This creates a cash buffer; they are charging more for what they purchased from the refinery at the old price. If a station or stations are owned by a single owner, they jump the prices up at all there stations at the same time. Case in point over the last few years we have seen price increases several days before long weekends, the prices stay inflated until the weekend has passed then the prices drop. Does this seem fair to you? There was no world event that could cause a shortage of oil, it was just a long weekend and the local stations wanted to grease their tills with the extra cash from fuel sales.
If it isnât refined here locally then itâs tankered in by train or transported in by truck. Itâs a stupidity game, played by all the local stations and itâs all about your dollars. The price at the pump will always be messed with and covered by some lame assed excuse about something irrelevant. Until the trade commission steps in and catches these jokers messing with the prices red handed, there is little you or I can do about it other than fuel up or not.
just filled up the other Day in Hope, 18 Cents less per Liter than PG , only one Word comes to my Mind “Greed” . PG you are at your Best, and don’t give me the Thing about Gas War! Williams Lake was 10 Cent less and there Gas comes from PG, I was told that at the Station.
http://www.vancouversun.com/business/bc2035/Palmer+Clark+ever+more+ambitious+natural+plans+bump/7340278/story.html
LNG, can you say colossal bust, the first proposed LNG plant can`t get anyone to sign long term contracts for decent price
If there is a glut of oil in the North American market, then prices are low and the consumers benefit. If we remove this oversupply by shipping oil to Asia, the oversupply ends and the consumer pays more.
Why is so hard to understand, Ruez, Pylot Project, and JohnnyBelt?
CriminalMind:
You might want to read this:
“Progress Energy stakeholders approve $6-billion takeover by Malaysiaâs Petronas
Published on Wednesday August 29, 2012
The Canadian Press
CALGARY â Stakeholders in natural gas producer Progress Energy Resources Corp. have overwhelmingly approved a $6-billion takeover of the company by a subsidiary of Malaysiaâs state-owned Petronas.
Calgary-based Progress said more than 99 per cent of both stockholders and debenture holders approved the arrangement in voting Tuesday.
Meanwhile, the company said the sale to Petronas Carigali Canada Ltd. is not being opposed by the federal government under the Competition Act, which requires major takeover deals to be of net benefit to Canada.
Petronas has received a âno actionâ letter from the commissioner of competition confirming the commissioner had reviewed the arrangement and concluded that âshe does not, at this time, intend to make an application for a remedial order under section 92 of the act,â Progress said.
Under the deal, Petronas is paying $22 per share for all outstanding shares in Progress, which is focused on natural gas exploration, development and production in northeast British Columbia and northwest Alberta.
Petronas originally bid $20.45 per share in June, but sweetened it offer a month later.
Petronas has said the deal would strengthen its position as a supplier of liquefied natural gas â gas that has been chilled into a liquid state, enabling it to be shipped overseas by tanker.
Petronas and Progress were partners in British Columbiaâs Montney region before the acquisition was announced and the two had been considering building a liquefied natural gas terminal on the West Coast.
The companies announced along with the takeover deal that they had selected Prince Rupert, B.C., for the location of the proposed LNG terminal.”
Cheap pipe, great eh!…Experts pegged the cost of the Enbridge pipeline to Kitimat at..
$16 to $18 billion, mountains ranges, 800 salmon rearing rivers, major snowfall, how indeed did Enbridge think they could build it for $6 billion..
Now we know, cheap pipes ans foreign labour..
Enbridge are indeed fabricators..
http://thetyee.ca/Opinion/2012/10/04/Enbridge-Pipeline-Engineer/
Costco will be building a gas bar so the oil companies are putting it to us now.
Lets stop exporting grain so we can have bread prices below world prices. Same logic here. Imposing bottelnecks on commodities dosne’t, hasen’t and won’t work.
herbster: “If there is a glut of oil in the North American market, then prices are low and the consumers benefit. “
As others have noted, we are already paying world prices. This pipeline won’t change that. Gas prices are going one way, and that’s up. One pipeline isn’t going to change it, other than to give the oil companies another excuse.
Why did any of our ancestors ever come here if they had to pay ‘world price’ for all the commodities we abound in?
Couldn’t they have just done that right where they were?
Why endure all the hardship that so many endured trying to have a life more abundant if some ‘global market’ determines your domestic prices?
Lets face some FACTS here.
The overall actual cost of all ‘production’ is all ‘consumption’ over one and the same time period. We ‘produce’ more than we ‘consume’ ~ it can’t be otherwise, since no one can consume something that doesn’t exist.
The way that commodities are currently priced ‘financially’ works very well in determining what any producer has to charge for his product to recover what’s been expended by him and provide him with an adequate inducement in the way of a profit (if his product is in actual demand) to keep producing.
But it fails miserably in providing the necessary incomes to consumers as a whole to meet those prices as they’re currently determined.
And it does so ever increasingly as the ALLOCATED charges associated with the utilisation of Capital exceed the DISTRIBUTED charges of Consumer incomes via wages, salaries, and dividends.
The difference is not hard to determine. It is the ratio by which TOTAL national production, of all goods and services exceeds the TOTAL national consumption of same, over any same given time period.
If we were apply to all consumer prices as they are presently set, a factor representing the percentage by which all ‘production’ has exceeded all ‘consumption’, and rebated every price by that amount at the point of final retail sale in Canada to the consumer, we would be selling our products to our consumers at the true cost of their production.
The seller would get the price he needs to cover his financial costs, make a profit and stay in business. So he loses nothing. But Consumers would get their goods at a discount, funded by a creation of new credit by the Bank of Canada.
There is nothing inflationary about this process, nor does it need to be funded through any form of taxation. Contrast this with what governments already try to do to enable consumers to more fully buy the ‘fruits of their labors’.
All things, like stimulus spending, running deficits, etc., which ARE always inflationary, and result in either higher taxes or the future hardships of induced austerity. Time to look beyond where we’ve been looking, and failing to find any answers. What have we got to lose that we’re not already increasingly losing?
JohnnyBelt- we are not paying world price. Montreal and Toronto are, and the gas price there is $1.58/litre. Think its bad now? Just wait, it’ll get worse, and much faster with Northern Gateway.
I disagree. I think gas prices are going up no matter what. It’s best if everyone gets used to the idea.
Enviromentalists want it both ways; use less oil AND keep oil prices down. As Jeff Rubin points out in his book The End Of Growth, basic economics means we get one or the other. When the price of oil goes up, we use less. Simple.
I’m really keeping an open mind on this pipeline, one way or the other. I am the poster child of “on the fence”. Having said that the more absolute spew I hear from some of the people against it is really starting to tip me the other way – lol. This lady talks like our prices will double the day the pipeline opens… come on now. If you want to convince me of your side of an arguement you have to at least be somewhere within the grasp of reality. I bet she was one of the people screaming that gas would be $1.50 per litre about five years ago.
“Lets stop exporting grain so we can have bread prices below world prices” .. haven’t seen a car yet that runs on bread, or wheat for that matter….the BIG difference is, most people can go without bread, most people can’t go without gas if they want to work.
Interceptor-you obviously didn’t listen to her speak. There was nothing about gas prices doubling. Open mind really?
“”Lets stop exporting grain so we can have bread prices below world prices” .. haven’t seen a car yet that runs on bread, or wheat for that matter….the BIG difference is, most people can go without bread,”
Is bread the only thing that’s made from grain? Hm, that’s news to me.
I was lined up to pay in advance for my gas at Crappy Tire. I made the guy behind me chuckle and guffaw. I said to the clerk, “Just thirty bucks worth of the cheap stuff in case the price drops back down to $1.29 cents a litre overnight.
Harbinger…$30 bucks ? I remember your story about running out of gas a few months back.
Got my gas guage fixed but I still don’t trust it. It can’t be specific. I always carry a gallon of gas in the trunk. I know better now.
China has the third lowest gas prices in the world for a net importer of oil. They pay a small fraction of what we pay for fuel at the pumps.
The Chinese also refuse to pay carbon taxes even for their national airlines in foreign ports.
You see the Chinese understand that fuel is a exponent of labor… one dollar of fuel is equal to one hundred dollars of human labor (in the work that it can be leveraged for) for example. So cheep fuel makes an efficient economy through the multiplier effect of the value fuel brings to get work done. (The principle Romney hopes to get elected on)
The Chinese know that our ‘carbon tax’ hinders our economic engine and their low tax subsidized fuel revs the engine of their economy. They also know that if they can help to artificially increase our fuel costs while fully controlling their own through state owned enterprises they can in effect regulate our economic output in relation to theirs.
One thing the Chinese are not is stupid.
Problem is we, as Canadian consumers, are caught in the political netherworld, where our politicians tells us to cut back on our use or pay a higher price, but at the same time pander to big oil and make it a very very lucrative business in Canada, and promote the unchecked raping of the land to extract and export it.
Harb: “I was lined up to pay in advance for my gas at Crappy Tire.”
You know you can do that right at the pump right? Or do you not have a bank card?
It’s a “social thing” to me. Must be the “Luddite” still in me.
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