Pipelines to prosperity? – by Madhavi Acharya-Tom Yew (Toronto Star – May 19, 2012)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

For most Canadians, the 700,000 km of crude oil and natural gas pipelines that criss-cross the country are out-of-sight and out-of-mind. Until the massive energy infrastructure intersects with international politics, the economy and environmental activism.

Projects like Keystone XL, Enbridge’s Line 9, Northern Gateway bristle with controversy (despite U.S. presidential candidate Mitt Romney’s pledge Friday to approve Keystone on his first day in office).

But the pipelines that carry millions of barrels of oil and millions of cubic feet of natural gas could transport Canada itself into the ranks of the world’s energy super powers.

But only if we move beyond our single biggest customer, the U.S., and begin supplying energy to the rest of the world – particularly energy-gobbling emerging markets, soon.

“Canada would be competing with a lot of other countries for access to those markets. That window of opportunity will not last forever. Even though we may have an abundant source of those products, at some point people are just not going to knock on our door if they can get the supply from somewhere else,” said Philippe Reicher, vice president, communication and stakeholder relations for the Calgary-based Canadian Energy Pipeline Association.

Canada’s first big oil and energy pipelines were built in the 1950s when the country’s population was booming.

For decades, the pipelines connected Canadian producers to consumers in the U.S. – the biggest energy users in the world.

The good news is that Canada has been increasing its share of the U.S. market. America still gets most of its oil, about 40 per cent, from OPEC. But a full 25 per cent of its oil now comes from Canada, its largest individual supplier.

The bad news is the market is shrinking.

In 2011, the U.S. imported just 45 per cent of the liquid fuels it consumes, down from a record high of 60 per cent in 2005.

As the U.S. economy begins to show signs of life following the devastating financial crisis and recession of 2008, demand for gasoline and petroleum products has not returned to previous levels, economists say.

With millions of people still unemployed, there are fewer people are driving to work. Consumers still worried about their jobs and their finances are less likely to travel. Increased fuel-efficiency of cars and trucks has also curbed demand.

Observers say even the Internet is having an impact, as young people opt to telecommute, as well as shop and connect with peers online, rather than get into cars.

“There has been a shift and it remains to be seen how permanent it is,” said Warren Mabee, assistant professor and director of Queen’s Institute for Energy and Environmental Policy at Queen’s University.

“The idea that you buy a car and go cruising on the weekend, that’s started to go away. It’s not nearly as much fun. The roads are clogged. It’s not the ‘50s. We’re not free-wheeling down to the drive-in.”

For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/1180903–pipelines-to-prosperity