Oil and gas development has been an economic boon for regions across the country.
A new Fraser Institute report suggests that the Canadian government should take steps to realize another economic boon by lifting the four decade old moratorium on offshore drilling on the west coast of British Columbia.
The report, released on Monday, claims that Canada could see a net benefit of $9.6 billion, over 25 years, if the federal and provincial governments just allowed for oil and gas exploration for one project in what's known as the Queen Charlotte Basin.
"Since the establishment of the moratorium on BC offshore oil exploration and development, other jurisdictions such as Norway, the United Kingdom, and Newfoundland and Labrador have developed offshore oil resources and enjoyed tremendous economic benefits through increased energy-related investment, massive positive economic impact on the economy," notes the report.
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"For example, Newfoundland and Labrador averaged $1.2 billion in annual industrial benefits from the offshore oil sector between 1990 and 2009. The offshore oil sector in Newfoundland and Labrador has also generated $43 billion in gross domestic product (GDP) between 1997 and 2007—around 25 per cent of the province's total GDP over that period."
And what about the concerns over oil spills?
Joel Wood, author of the study, argues that Newfoundland & Labrador's offshore oil industry has had a strong safety record with only one spill over 50 barrels since oil production began. And while there have been large oil spills in the Gulf of Mexico, Wood says it's not a good comparison.
"Better funded Canadian regulators, the absence of hurricanes, and shallower water depths suggest that the BC experience will be safer than drilling in the Gulf of Mexico," he wrote adding that there is an 82.6 per cent chance that a large spill will not occur — on B.C.'s coast — over the life of the project.
It certainly does make economic sense, but don't expect it to happen any time soon.
The Tories and the provincial Liberals have both indicated that they have no intention of lifting the moratorium.
There is also an issue of First Nations territorial claims. According to report by the Canadian Centre for Policy Alternatives at least four First Nations claim rights and title over Queen Charlotte Sound marine resources and some of them have publicly stated that they want the moratorium to continue.
And, if the oil industry thought they had a fight on their hands with the environmentalists with regards to the Northern Gateway pipeline, I would venture a guess that the offshore drilling protests would be epic in comparison.
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