By Kenneth P. Green
and Taylor Jackson
The Fraser Institute
During the recent election campaign, the new federal government committed to pursuing evidence-based public policy. In the mandate letters delivered to each minister at the end of last week, there’s a sentence that states: “our work will be informed by performance measurement, evidence, and feedback from Canadians.” We applaud that sentiment: the unofficial motto of the Fraser Institute is “If it matters, measure it.”
It’s curious then why one of the first mandate items that the new minister of transportation will follow is to “[f]ormalize a moratorium on crude oil tanker traffic on British Columbia’s North Coast.” Because any review of the actual data on tanker safety would dispel the idea that this policy is evidence-based.
Earlier this year, a Fraser Institute study examined the safety of oil transportation by tanker in Canada. The study concluded that, in general, moving oil by tankers is safe and has been improving and that, in fact, Canada has an outstanding record on maritime oil spills.
According to Transport Canada, there has only been one major oil spill in the last 20 years off Canada’s West Coast, and it did not involve an oil tanker but rather resulted when the Queen of the North ferry sank with 240 tonnes of oil on board.
Regarding moving oil on B.C.’s North Coast, Northern Gateway estimated that the probability of a tanker spill during the operation of the pipeline was approximately 0.4 per cent in any given year.
Let’s look at global tanker safety trends. In the 1970s, there were on average 24.5 large spills (more than 700 tonnes) per year around the world. This declined to an average of two large spills per year in the first four years of the 2010s.
The trend for medium sized spills (seven to 700 tonnes) also declined significantly, from an average of 54.3 spills per year across the globe in the 1970s to an average of five per year during the first part of the 2010s.
In addition, of all the oil spilled at sea from 1970 to 2009, 56.0 per cent was spilled in the 1970s, 20.5 per cent in the 1980s, 19.8 per cent 1990s, and only 3.7 per cent in the 2000s.
These reductions in accidents and the amount of oil spilled each year have come when the amount of oil being shipped by sea has been increasing. In 1970, 1,207 million tonnes of loaded crude oil was transported by sea. This number has increased to an estimated 1,710 million tonnes of loaded crude oil in 2014.
When the broader data on maritime safety and oil transport are considered, the evidence points to a high degree of safety that has continued to improve over time.
This is not to say that concerns about safety should not be paramount. But it needs to be recognized that economic consequences will follow from the moratorium.
The move to place a moratorium on tanker traffic likely ends the prospect of constructing the Northern Gateway pipeline, hampering the ability of Canadian oil to gain access to new and growing markets. This pipeline would have helped Canada diversify its energy exports, thereby becoming less reliant on the United States, which is increasingly producing its own oil.
The International Energy Agency recently released their 2015 edition of the World Energy Outlook and it projects that, even taking into account new policies which intend to reduce CO2 emissions, Asia’s demand for oil is expected to increase from 20.8 million barrels per day in 2014 to 34.4 million barrels per day in 2040. Without a way to increase shipments of Canadian oil to areas of growing demand, Canada will miss out on the economic prosperity that comes with developing our resources.
One analysis noted that a pipeline and port project exporting oil from Canada’s Pacific coast could increase gross national product by $270 billion, labour incomes by $48 billion, and government revenues by $81 billion over 30 years.
Issuing a moratorium on oil tanker traffic off B.C.’s north coast ignores the evidence on the safety of transporting oil by sea. This ban will stifle Canada’s ability to realize the economic benefits of exporting our resources to where there is demand.
Kenneth P. Green is Senior Director and Taylor Jackson is a Policy Analyst in the Centre for Natural Resource Studies at The Fraser Institute.