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Oil spill could cost the north coast economy more than $300 million, UBC study finds

This photo from May shows a slick of fuel on the waters near Hartley Bay when an oil spill was reported near the community. - File photo
This photo from May shows a slick of fuel on the waters near Hartley Bay when an oil spill was reported near the community.
— image credit: File photo

An oil spill on the north coast could result in more than $300 million and over 4,000 person years of employment being lost from the region's economy, said a study by UBC released this morning.

The study, authored by UBC Fisheries Centre director Rashid Sumaila with funding from the World Wildlife Fund Canada, examined what would happen if there were a medium or large-scale oil spill from a tanker carrying crude oil.

In the event of a medium spill of 10,000 cubic metres of hydrocarbons, the study says the regional economy would lose between $41 million and $189 million, between 399 and 1,314 person-years of employment and $23 million to $89 million of Gross Domestic Product (GDP) over 50 years.

In the event of a large spill of 41,000 cubic metres of hydrocarbons, the losses would balloon to between $87 million and $308 million, between 1,652 and 4,379 person years of employment and between $72 million and $205 million of GDP over 50 years.

The losses are based on the impact to commercial and recreational fishing, port activities, ferry transportation and marine tourism.

But the report takes it a step further and looks at the cost of cleaning up any potential spill in the area. Should a medium spill occur the costs of clean-up would be in the area of $2.4 billion while a large-scale spill would cost $9.6 billion.

In comparison, the authors note the Northern Gateway could produce economic effects of $628 million, between 5,717 and 8,369 person years of employment and $293 million in GDP over 50 years.

Although the financial implications outlined in the report are quite high, the authors note that there are a lot of things that weren't taken into account during the study.

While this study provides a highly conservative first estimate of the potential economic impacts of a tanker spill in the North Coast region of British Columbia, several potential impacts on valued ecosystem services were not assessed. These include social, cultural and ecological values to residents and non-residents of the region. Additional investigation of these values, including those related to food-social-ceremonial fishing, would provide a more complete estimate of the total economic value related to the ocean in the North Coast region and support informed decision-making for industrial developments, such as the Enbridge Northern Gateway project,” it reads.

If these costs are accounted for, all of the projected economic gains from the Enbridge Northern Gateway project could quickly turn into losses in the event of a tanker spill.”

Todd Nogier, manager of corporate and western access communications for Enbridge, said the company has a number of concerns about the study.

One concern is that they are taking the economic benefit that is certain to occur and comparing it with spill costs of an event that is highly unlikely to occur... It doesn't take the low probability into account. The report states a large-scale spill is a 15,000 year event, which we have no disagreement with, but most economic impact analysis will take the probability into account,” he said, adding that Enbridge is taking steps to mitigate any potential spill and improving on emergency response in the region.

A spill of this magnitude has never happened in Canadian waters. The Canadian oil marine industry has a world-leading safety record and has not had a spill.”

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