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Kinder Morgan holds few benefits

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by Liz McDowell, December 16, 2014

It’s been a whirlwind couple of weeks up on Burnaby Mountain. In a high-stakes stand-off late last month, hundreds of protestors clashed daily with Kinder Morgan surveyors over the company’s right to test drill in a city park. The Burnaby RCMP arrested over 100 grandmothers, First Nations leaders, Clayoquot Sound veterans and other local residents for stepping over what turned out to be a fictitious line (somebody needs to check their darn GPS), and local politicians in Burnaby declared war on the proposed expansion of the Trans Mountain oil pipeline.

Now that Kinder Morgan surveyors have packed up their machinery and the hubbub has died down, it’s time to step back and look at the bigger picture. What, exactly, would this pipeline bring us that is worth all the controversy and conflict? As British Columbians, what are we really getting out of the project?

Earlier this month, a report from economists at the SFU Centre for Public Policy Research and the Goodman Group found that Kinder Morgan had over-estimated the number of jobs created by the project by threefold. This means that during the project’s construction, at most 4,000 short-term jobs would be created.

Compare this to the tens of thousands of jobs in tourism, retail and other marine-based sectors that would be impacted if there was a major oil spill in Burrard Inlet, and the project starts to feel like a real risk for our local economy. The same report also found that only?2 per cent of the project’s benefits would flow to BC, whereas tar sands operators would retain a whopping 68 per cent of revenues. The rest of the revenues would flow to Alberta and other provinces.

CRED’s own research has found that tax benefits would also be tiny. Burnaby, the municipality that stands to benefit the most, would be able to fund at most 1/12th of its parks and recreation budget from additional tax benefits. And that’s assuming no repeats of the 2007 spill on Inlet Drive, since a mishap like that could immediately wipe out all the municipal gains.

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Provincially, the amount of benefit Kinder Morgan claims this project would bring would fund, at most, two-thirds of the running costs of just one of BC’s 99 hospitals. Now, that’s hardly a nation-building project. You can bet that Kinder Morgan’s announcement in late November that the company has quietly sold all its assets to its American counterpart certainly won’t increase the benefits to British Columbians, either.

A recent report came out claiming that there are now more Canadian jobs in clean energy than in the oil sands. Our own research has found that there are more jobs in the brewing and beer economy than in the whole of the oil sands. So why it is assumed that finding export markets for oil is a national priority but building clean energy jobs and, more importantly (sorry solar panels but a nice microbrew beats you any day), beer jobs isn’t?

Maybe what we really need is a beer pipeline.

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Electrifying transportation in BC

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Vancouver hosted Canada’s national electric vehicle conference?last week, which brought attention to the growing support of electric vehicles (EV’s) and plug-in hybrid vehicles in urban areas. So how big is this sector in BC, and do we have the infrastructure to support increased adoption of electric cars?

Huge growth in charging stations

The B.C. government announced in January it would spend $1.3 million to install 30 fast-charging electric stations in the Lower Mainland, Vancouver Island, Merritt, and Kamloops. In addition,?Tesla installed a six-stall charging station in Squamish, making a longer trip between Whistler and Vancouver possible, and more stations are slated by the company for Revelstoke, Hope, Kamloops, Golden, and Banff. Meanwhile, existing public charging stations have seen a big increase in use over the last year. And this is all part of a bigger trend – the Fraser Basin Council and Powertech Labs reported?that the number of vehicle charging sessions in the province has doubled between August 2013 and August 2014. (Over 350 of B.C.’s 550 public charging stations are tracked by Powertech Labs, a BC Hydro subsidiary.)

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How does BC’s construction sector break down?

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Construction generates a lot of buzz, especially when talking about the jobs created by new oil & gas projects. Here, we take a deeper dive into the sector as a follow-on from our recent report,?“What’s Fuelling BC’s Economy?”?

Are construction jobs the missing link?

In BC, the construction sector – building everything from houses to roadways – is responsible for 7% of our GDP and almost one in ten jobs. It’s also one of our province’s fastest-growing sectors. But how does it break down, and what are some of the factors that keep the construction sector booming?

What fuels?construction?

The construction sector is one of the primary drivers of our provincial economy. It’s a $15 billion dollar industry in BC – and over the past decade, has consistently been one of the fastest growing sectors.

So where is this growth coming from? Just over half of the GDP from BC’s construction sector comes from retail and commercial building construction and another 16% comes from repairs. Finally, the remaining 31% is from industrial projects, everything from roadways to hydroelectric dams [source: BC economic accounts – download].

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What Canada and Alberta could learn from Norway

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Should Canada adopt the same energy model that made Norwegian citizens theoretical millionaires?

Written from an interview with prominent Vancouver business leader Leonard Schein

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What is Norway’s energy model?

To understand Norway’s energy model, it’s helpful to go back to 1962, when excitement ignited about the possibility of oil in the Norwegian Continental Shelf (NCS). A year later, Norway claimed sovereignty over the NCS and deemed any natural resource found there the property of the government. This initial government response forms the basis of the very different philosophies between Norway and Canada on natural resource ownership. While Norway claims ownership over oil in its land, Canada assumes that any oil in the ground belongs to the companies that extract it.

Playing hardball

The disparate philosophies of the role of government in the oil industry seem to be at the crux of Norway and Canada’s very different paths in the industry.?In 1972 the Norwegian government established its own oil company, Statoil, which was awarded 50% of all petroleum production licenses. (Currently the government owns 67% of?Statoil, and the other 33% is public ownership.)

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How big is BC’s energy sector?

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How important is the energy sector to BC?

And is it more or less important than other sectors? ?We’ve compiled this report to find out where the jobs, GDP and growth are coming from in order to determine BC’s main economic drivers.

DOWNLOAD “What’s fuelling BC’s economy?”

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CRED releases new report

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A new report from CRED, How do pipeline spills impact property values?, reveals that an oil spill in?Burrard Inlet or along BC’s south coast has the potential to negatively impact property values and cost jobs in real estate and property development, in areas both adjacent to spill sites as well as the surrounding region.

DOWNLOAD THE REPORT
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The research concludes that oil spills have direct and lasting impacts on property values. In particular, the report finds that: ?

  • In eight documented cases, properties directly impacted by spills were significantly devalued
  • Nearby properties lost up to 8% of their value
  • Where homes relied on well water and the groundwater was contaminated, the value loss was permanent

The goal of the report is to increase access to information and support a transparent conversation around the economic risks and rewards of Kinder Morgan’s proposed new Trans Mountain pipeline.?CRED is calling for an independent study of the economic risks of the proposal.

Downloadable image highlighting the report’s main conclusion:

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Business leaders react to the report’s findings

This report brings up important information and concerns. As planners, it’s our job to be aware of all potential risks to housing and land values. We hope that the government will take action to protect Vancouver’s market from the impacts of an oil spill.” – Blaire Chisholm, Planning Manager at Brook Pooni Associates

Vancouver is famous the world over for its natural beauty and pristine environment. This is the driving force behind all of our real estate-related industries. As a realtor, it is my responsibility to let my clients know about the risks they could face by buying a property near pipeline infrastructures.” – North Shore realtor and CRED advisor Dallas la Porta

As a realtor I have noticed that with the huge amount of negative publicity surrounding the expansion of this pipeline, people are on red alert and are very aware of the potential impacts of the pipeline on their properties. As a result, buyers will typically avoid a?property anywhere near a pipeline and this does have a negative impact on values.” – Langley realtor Annabel Young

Read the full report here?

How do oil spills impact property values?

Photo credit: John Lehmann/The Globe and Mail

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The following is an excerpt from CRED’s upcoming report. To be notified when the report is launched and available for download, please contact us or join our mailing list.

Introduction

British Columbia’s property development sector is a significant driver of economic growth and an important source of employment. According to the Urban Development Institute, the sector is directly and indirectly responsible for over 220,000 jobs across the province, in areas from planning and construction to secondary supplier purchases. It makes a bigger contribution to provincial GDP than any other sector – more than natural gas, tourism, mining, forestry or film and television.

In the real estate sector, a sub-section of the property development industry, there are over 14,000 people working as realtors in Greater Vancouver, Vancouver Island and the Gulf Islands alone. The coastal real estate market is also important to private homeowners who gain value not only from a physical property but from its viewscape, proximity to waterfront and wilderness, and location in one of the world’s most liveable regions.

CRED is seeking to better understand the risks of an oil spill as part of an ongoing dialogue about the economic future of the region. Where are the best places to invest for future growth and prosperity? How can we safeguard our quality of life and support industries that will ensure long-term responsible development?

Real World Examples

To begin assessing risk, we gathered information on eight separate oil spills in the US and Canada. In three of the cases, the spills directly impacted properties and in two further cases, the proximity and perceived impact of the incidents devalued properties. In the final three cases, residents have claimed values losses but they have not yet been independently confirmed.?

Case study: Pepco Pipeline, Maryland, 2000

Loss in value: 11-12% in the 1st year

In 2000, a 3,800-barrel (120,000-gallon) oil spill in a suburb of Washington DC affected property near the Patuxent River. A study published in The Appraisal Journal in 2001 concluded that waterfront and beach-access homes were significantly and negatively affected by the spill.

In the year following the incident, home values within a 10-mile study area fell 11%. In addition, waterfront properties experienced reduced sales volume. According to real estate listing data, only three waterfront homes sold in the first sale season after the spill, a 40% decrease from the previous year. Because there was no substantial variation in regional markets, the study concluded that this decline was likely due to the spill.

This is a small excerpt from an upcoming CRED report on the link between oil spills and local property values. If you would like to read the whole report, please contact us or join our mailing list.

Innovating beyond the beaver: Credible Conversations with Michael Tippett

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast.

How to make a billion dollars: building an innovation economy

Michael Tippett, lifetime tech entrepreneur and current Director of New Products at Hootsuite, shares his thoughts on Canada’s economy past and present. Here’s his call to grow rather than harvest, create rather than extract, and to disrupt everything:

Credible Conversations panel: What does responsible economic dev’t mean in BC?

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

What does responsible economic development look like in BC?

The second experts’ panel explored economic alternatives: if we don’t built new oil pipelines, then what will our economy be based on instead? What industries should we nurture and support? Where will jobs, innovation and growth come from?

Moderated by Tara Mahoney from GenWhy Media, panelists included Linda Solomon from the Vancouver Observer, Bradley Shende from M2O Digital Agency and Rueben George from the Tsleil-Waututh Nation and TWN Wind Power.

Watch the full discussion here:

Credible Conversations panel: Will new oil pipelines benefit BC businesses?

Panel BC biz and pipelines

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

Will BC businesses benefit from new oil pipelines?

The first experts’ panel explored the economic impact of oil pipeline development on the province’s economy as a whole.

Moderated by Mandy Nahanee from the Squamish Nation, panelists included Karen Campbell, a staff lawyer with Ecojustice, Wes Regan, CEO of the Hastings Crossing Business Improvement Association, and Ngaio Hotte, an economist with the UBC Fisheries Economics Research Unit.

Watch the full discussion here:

And here are the slides used by Ngaio Hotte in her presentation. A more detailed analysis can be found on the UBC Fisheries Economics Research Unit “talking fish” blog.

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