Delays in Oil Pipeline cost Canadian economy $10.7 bn

Scotiabank stated that the delay in the construction of oil pipeline led to a sharp reduction in Canada’s crude price and cost the economy for about $15.6 billion a year. However, the decrease is projected to subdued throughout the year since higher rail capacity is ready to transport oil. This brought the estimated cost of  $10.7 billion or 0.5 percent of the GDP this year, followed by a  $7 billion or 0.3 percent of GDP a year.

The delays from the major oil exporters Enbridge’s Line 3 replacement, Kinder Morgan’s Trans Mountain expansion, and TransCanada’s Keystone XL further increase the costs of depreciation. The recent economic impact from pipeline issues occurred despite the argument between the British Columbia and Alberta regarding the structure of the  Trans Mountain project, arguing about the effects of coastline securities and lessening of greenhouse gas emissions towards the economy.

Moreover, the temporary shutdown of TransCanada’s Keystone pipeline in November caused the oil storage tanks of Alberta to fill record volumes and ship to the Western Canadian and U.S. crude worth more than US$30 per barrel. While the regulator set 20 percent reduced capacity to Keystone Pipeline System in order to curb the recovery.