Alberta’s pipeline pitch is heavy on public, light on private investment —

Alberta’s latest attempt to get a new oil pipeline approved has both the federal and provincial governments promising heavy public investment to move heavy crude oil, all in search of heavy economic benefits.

And despite a price tag that may only begin at more than $35 billion, government money may be both a worthwhile and necessary investment, say economists and industry analysts.

While technically the proposed pipeline to the southwest coast of B.C. is a public-private partnership, only 10 per cent will be in the hands of Calgary-based Pembina Pipeline Corporation.

The federal government, through its ownership of the Trans Mountain Corporation, and the Alberta government through its Alberta Petroleum Marketing Commission, will control 90 per cent of the project at first.

The benefits to the broader population are a key draw for governments, says University of Calgary economist Kent Fellows, who points out pipelines individually may not be a deeply profitable investment on their own. They aren’t exactly revenue gushers in this country.

“Pipelines do make money, but the amount of money that they make is limited by regulation and legislation,” said Fellows, an associate professor at the university’s School of Public Policy.

Fellows pointed out that increased employment, plus higher royalties and revenues to governments are the broad, aggregate benefits — and they spill over to other parts of the Canadian and provincial economies.

It’s not just higher energy revenues

The benefits economists and analysts project include jobs from the construction of a pipeline, the extraction work to fill the pipeline with product, and the ongoing sale of oil or gas through the network.

But there are jobs unrelated to the pipeline, point out economists and business leaders, as communities are gaining workers who need to live and shop where they work.

In Bruderheim, Alta., citizens are already hoping jobs may come to their community northeast of Edmonton. If the new pipeline is approved, it would begin in the small town of less than 1,500 people.

“As a town that had very little growth in the last 20 years, any, you know, positive growth would be a great thing,” said Mayor Ron Ewasiuk.

“We’re going to have more people come to our store and then our business will grow too,” said Bruderheim store owner Kim Chin Young.

And while those spillover effects described by economists like Fellows aren’t just for the oil and gas industry, it would see higher revenues too.

Jackie Forrest of the ARC Energy Research Institute in Calgary points out that when additional pipelines that provide alternatives to U.S.-based customers for Canadian energy open up, producers here…