Poll: Canadians Overestimate Value Of Oil Sands

A new poll by an environmental group indicates that Canadians, evidently persuaded by Conservative Prime Minister Stephen Harper, appear to have an inflated view of the economic benefits their country may reap from exploiting its tar sands.

Statistics Canada reports that production from oil sands accounts for no more than 2 percent of the country's gross domestic product. Yet the survey by Environmental Defense said 57 percent of respondents overrated that value, including 41 percent who say that contribution is between 6 and 24 times higher.

The group stressed, however, that its online survey, conducted by Environics, focused only on the economic benefits from existing oil sands ventures in the western province of Alberta, not benefits from the jobs and other ancillary economic benefits that are likely to grow from projects including pipelines that are now being planned.

Despite popular overestimation, Paul Ferley, an economist with the Bank of Canada, said that at even 2 percent of GDP, oil sands extraction represents a fairly large and growing sector of the country's economy. That makes it twice as large as Canada's automotive sector, he said. And Ferley emphasized that it's important to include the ancillary economic activity omitted in the Environics poll.

The survey questioned 1,011 adults nationwide between June 18 and June 23. Neither Environmental Defense nor Environics reported a margin of error for the poll.

Tim Gray, the executive director of Environmental Defense, issued a statement dismissing the Harper government's characterization of exploiting Canada's natural resources, including oil sands, as crucial to the country's economic growth and that to hamper them would likewise hamper development.

"The [oil sands] are not the primary driver of our economy," he said. "Their contribution is relatively small and certainly not sufficient to justify the risks of planned massive expansion."

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Despite their overestimation of the value of oil sands, about 75 percent of the poll's respondents believed that Canada should wean itself gradually from fossil fuels and rely more on cleaner alternatives.

Although the oil sands industry likely will provide an estimated $79 billion in revenue to the Canadian government during the next two decades, the extraction program remains a key controversy in the country as opposition has been mounting from environmentalists and Canada's First Nations.

There's also been resistance in the United States. Canada had hoped to export the crude oil through the proposed Keystone XL pipeline to the Gulf of Mexico, but has been stymied by protests from U.S. environmentalists, the U.S. Environmental Protection Agency and the U.S. State Department, which must give final approval to the pipeline but has postponed its decision.

This appears to have led Harper's government to push only harder. It estimates that various companies intend to invest over $610 billion in oil sands projects in the next 10 years, so to protect this effort, Ottawa has decided to invest $24 million campaign to improve the public image of oil sands extraction.

By Andy Tully of Oilprice.com