The financial costs of a worst-case scenario tanker spill off the north coast of British Columbia could outweigh the economic rewards of the proposed Northern Gateway pipeline for the region, says a study by the UBC Fisheries Centre.
The study funded by World Wildlife Fund Canada looked at the potential losses to commercial fisheries, tourism, aquaculture and port activities in the area in the event of a tanker accident.
Using the 1989 Exxon Valdez spill as an example, researchers calculated various scenarios, from a spill with no impact to a high-impact spill of 257,000 barrels of crude, in winter, over 52 kilometres of coastline that includes Haida Gwaii and Porcher Island, near Prince Rupert.
"The study highlights that if a tanker spill occurs, the economic gains from the Enbridge (TSX:ENB) Northern Gateway project to the North Coast region would be wiped out by the costs of the spill," said Rashid Sumaila, director of the fisheries centre.
Ocean-based industries directly employ about 10 per cent of the population of the North Coast. When indirect benefits are included, they account for approximately 30 per cent of regional employment.
Total losses due to oil contamination could range from $90- to $300 million in lost output in other ocean industries, thousands of jobs and up to $200 million of lost gross domestic product, said the report released Wednesday by Sumaila and Ngaio Hotte.
That compares to total economic benefits from the project for the region of $628 million in direct output, up to 8,000 jobs and $293 million in GDP.
Overall, the project is expected to boost Canada's GDP by $270 billion over 30 years, $2.6 billion in tax revenues for local, provincial and the federal governments, and generate $81 billion in direct and indirect revenues to the federal and provincial governments.
No one from Enbridge could immediately comment on the report.