I will continue.
My name is Joseph Gargiso. I am the administrative vice-president of CEP as well as the union's bargaining program coordinator for the oil sector.
Since the document is in English, it will be easier to read it in English rather than translate as I go. But we will send you the French version.
In regard to oil supply, Canada is blessed with remarkably large deposits of oil and natural gas. Most is extracted from western Canada, but the Atlantic region also extracts significant quantities. On paper, we are self-sufficient in oil, but in practice we are not. Despite our apparent abundance of fossil fuels, we could face serious shortages—even rationing—in the future.
The biggest problem we face is reliance on imports of crude oil in eastern Canada. The Atlantic provinces, and Quebec in particular, import most of their oil from overseas. Quebec refineries receive only 13.5% of their crude oil from Canada. The rest is imported from foreign sources, principally Algeria, the North Sea, Kazakhstan, and Angola. Some of these countries have experienced political turmoil and even civil war in recent years. Fortunately, oil supply was not disrupted, and we hope our luck holds.
As with Quebec, the Atlantic provinces receive only a small percentage of their crude oil from Canada—a modest 17%. The rest is imported from foreign sources. About half is from OPEC countries, such as Saudi Arabia, Nigeria, Iraq, Venezuela, and Angola. The remainder is sourced from the North Sea and a variety of other countries, such as Russia, Brazil, and Equatorial Guinea. Some of these countries have experienced political turmoil and civil war in recent years. Fortunately, the oil supply was not disrupted, and we hope this continues.
Finally, while Ontario also imports a significant quantity of its crude oil from foreign sources, it does enjoy the most secure source of oil of the eastern provinces: Canada. Nearly 80% of the oil refined in Ontario is sourced within Canada, but the energy security of the province remains uncertain because its inadequate refining capacity leaves it dependent on foreign sources for refined products.
In regard to misguided pipeline proposals, two pipeline projects recently have been proposed that CEP believes are contrary to the public interest as they would lock Canada into dependency on foreign suppliers for our basic energy needs. If built, the TransCanada Keystone XL pipeline to the United States and the Enbridge Northern Gateway pipeline to the Pacific coast would commit Canada to exporting large quantities of raw bitumen from western Canada for processing out of the country. We should not export this energy source before ensuring our own energy independence and security.
It is unimaginable that the United States, any European country, or China would ever allow themselves to be dependent on other countries for their energy supply if they could avoid such a potentially difficult and even dangerous situation. Our energy security is already partly compromised by NAFTA's proportionality clause requiring Canada to export the same proportion of its energy to the U.S. even if we experience shortages at home. We shouldn't make matters worse by building more U.S.- or Asia-bound pipelines.
There is also the matter of jobs. Michael McCracken, the CEO of Informetrica and a leading economist who is very familiar with the Canadian oil industry, has estimated that for every 400,000 barrels of raw bitumen exported out of the country for upgrading and refining, 18,000 jobs in Canada will be lost—18,000 well-paid jobs, as you heard from the representative from Suncor, the kinds of jobs we have in this industry.
That is a very conservative number, because Mr. McCracken did not estimate how many jobs would be foregone in downstream activities such as the manufacture of chemicals, petrochemicals, plastics, or other derivative products. It is clearly not in the interest of Canadians to export this raw bitumen, for reasons of both energy security and job creation.
We understand that oil companies, foreign- and domestic-owned, want to maximize their short-term profits by exporting raw bitumen out of the country, but allowing thousands of jobs to be shipped to the United States or China smacks of the most elementary excesses of our colonial past. We should process our natural resources at home. It is high time our federal government spoke for Canada.
In regard to energy independence and security for Canada, it is a truism that we live in an uncertain world. In recent months, this has been underlined by talk of a military attack on Iran. If such an attack were to occur and were Iran to shut the Strait of Hormuz in retaliation, as it has threatened, 40% of oil from the Middle East would be cut off.
Can we reasonably believe we would be first on the list to receive our full share of a much smaller overseas oil supply from our foreign suppliers? The reality is that if a disruption were to occur, we would be forced to cut back drastically. If the disruption occurred in the winter, we would face rationing of heating oil, and many thousands of people would need to be moved into shelters.
Would Europe, facing severe shortages of oil at home, continue to supply us with the refined products we were importing, or would it supply itself first? To pose the question is to answer it. Eastern Canada would be cut off from European supply and face rationing and economic disruption.
The regions most vulnerable to a disruption in oil from the Middle East are the Atlantic provinces, which currently rely on that region for one-quarter of their oil supply, and Ontario, through its dependence on refined products sourced from foreign countries themselves dependent on the Middle East.
Some of our suppliers have faced civil strife in the past. If such problems flare up and intensify in the future, our oil supply could be adversely affected, with serious consequences. Let us hope this does not occur, but to rely on good fortune is not prudent policy.
There is also uncertainty of a less dramatic nature with respect to imports of refined products from Europe. Currently Europe is experiencing a glut of gasoline production and is happy to sell its excess production to us. However, in the medium term, European refiners may try to reorient away from diesel and push for higher consumption of gasoline, or, failing that, they may shut their gasoline capacity entirely. Either way, their exports to Canada could be jeopardized in the medium term, at least at a reasonable price.
There was one potentially hopeful development in 2011. Enbridge proposed the reversal of its line 9 between Sarnia and Montreal to bring western crude oil to eastern Canada. If this proposal is accepted and the oil is refined in Canada, it could reduce eastern Canada's reliance on foreign oil by 20% to 25%. This would be a positive step toward energy independence, if it goes ahead.
Just to conclude, in short, CEP believes Canada should strive for complete energy independence and security for fossil fuel supplies, and eastern Canada must source its oil from western Canada. An east-west pipeline that joins Alberta to Ontario already exists: the TransCanada natural gas pipeline. We need an all-Canadian oil pipeline as well. It is the only way to be certain our oil supply will not be disrupted by competing interests in a time of crisis. Prior conditions to building the pipeline must be that aboriginal rights are fully respected and more stringent environmental standards are met.
To conclude, CEP calls on the Standing Committee on Natural Resources to recommend that the federal government ensure Canadian energy independence and security by re-establishing our independence in refined petroleum products in the Quebec-Ontario region by offering incentives to expand refinery capacity there; reducing our reliance on foreign oil by supporting the reversal of Enbridge line 9; and imposing the condition that the crude oil from western Canada be used to replace imported oil, thus ensuring complete Canadian energy independence and security by having a cross-Canada oil pipeline built to bring western crude to eastern Canada, conditional on the full respect of aboriginal rights and the highest environmental standards.
Thank you for your patience.