What is the net economic impact of the proposed Kinder Morgan pipeline?

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This page builds on information from a Tsleil-Waututh Nation report that assesses the proposed Kinder Morgan pipeline and tanker project. You can read and download the full report here.

 

The proposed Kinder Morgan pipeline would have a negative economic impact. In fact, the proposed pipeline is a net economic risk and cost to the Canadian economy, which would become a burden to the Canadian public (Allan, 2016, p. 4).

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(FROM “NEED FOR, COMMERCIAL FEASABILITY, AND ECONOMIC IMPACT OF THE TRANS MOUNTAIN EXPANSION PROJECT”, 2016, p. 3 and 4):

 

The net economic impact of the proposed pipeline becomes negative when:

  • A fulsome scope of issues is considered, which extends beyond the private economic benefits of crude oil producers and includes direct economic costs and opportunity loss;
  • Reliable and accurate pipeline and marine toll rates inform the analysis for both the Project and rail transport relied upon in the absence of the Project;
  • Supply projections that reflect current market conditions and climate change commitments are developed and adopted;
  • Crude oil prices based on market conditions are adopted;
  • Realistic expectations regarding market demand and potential market penetration inform the assessment;
  • Appropriate models reflect economic impact are relied upon; and
  • Double counting of benefits does not take place.

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The proposed pipeline would be a net negative economic cost, as it would likely not be used and useful over its lifetime: Current market conditions suggest that the proposed pipeline would be run at below its break-even point or even below its shutdown point (Allan, 2016, p. 32).

 

Because the proposed pipeline project would have a net negative economic impact, the project’s financial risks outweigh the time and money it would take to be implemented.

We have the chance to focus on a sustainable economy by the stopping the proposed Kinder Morgan pipeline. Click here to learn more.

 

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