A major oil spill could cost Vancouver’s ocean-dependent economy up to $1.2 billion
May 22 2015
The City of Vancouver’s ocean-dependent industries, which directly employ 4% of the city’s population, are a crucial economic driver to the City and its “Greenest City” reputation. A new study concludes that both of these could be negatively impacted by an oil spill as a result of a nearly seven-fold increase in tanker traffic, from 5 to 34 per month, resulting from Kinder Morgan Canada’s pipeline expansion proposal.
The City of Vancouver asked the Fisheries Economics Research Unit from UBC’s Fisheries Centre to quantify the potential economic costs of a major oil spill in the Burrard Inlet in order to inform the National Energy Board’s assessment of the potential costs and benefits of Kinder Morgan Canada’s proposed Trans Mountain Expansion Project.
The report, titled “Potential economic impact of a tanker spill on ocean-dependent activities in Vancouver, British Columbia” by Harmony Bjarnason, Ngaio Hotte and U. Rashid Sumaila, concludes that a major oil spill (16 million litres) could negatively impact Vancouver’s marine dependent economy by $380 million-1.23 billion in output value.
Five key ocean-dependent activities
The report looks at the performance of Vancouver’s five key ocean-dependent activities that are closely linked to the condition of the marine environment:
- Commercial fishing
- Port activities (shipping and cruises)
- Inner harbour transportation
- Tourism (marine recreation, waterfront events, visiting beaches and seawall)
Vancouver’s beaches attract over three million users per year, its waterfront parks attract five million users per year, and the seawall attracts over 2.7 million users per year – Vancouverites’ use of the beaches and seawall alone produces $145-170 million of value per year to the local economy.
In total, ocean-based activities in Vancouver are estimated to currently contribute to the Vancouver economy per year the following:
- $6.43-6.70 billion in output value
- $3.06-3.26 billion in GDP
- 32,520-36,680 person years of employment
Spill scenarios find larger losses in May than October
The report analyzes a 16 million litre spill scenario at the First or Second Narrows in May and in October, and finds that the Vancouver economy experiences larger losses under a May spill scenario than an October spill scenario since roughly 50% of ocean-based economic activity occurs during peak tourist season between May 15-Sep.1. Total economic losses resulting from a May spill could be 115%-175% higher than from an October spill.
In the event of a spill in May, the local economy could suffer total losses in the range of:
- $380 million-1.23 billion in output value
- $201-687 million in GDP
- 3238-12881 person years of employment
Projected losses substantial
The report concludes that the projected losses from an oil spill in the Burrard Inlet would be substantial, and could cost the city hundreds of millions of dollars in lost economic opportunities. The costs could be substantially higher given the study did not consider losses arising in other parts of the economy, the loss of brand reputation and property value, or the costs of response, clean up and recovery.
City to publicly file evidence with NEB
This report forms an integral part of the written evidence that the City of Vancouver will be submitting to the National Energy Board on May 27, 2015.
Public input wanted
The City continues to collect people’s questions and concerns about the proposal, helping to inform the City’s process and ensure that all voices are heard.
You are encouraged to:
- Join the conversation on Twitter at #TalkTankers
- Fill out our online survey
Second Narrows Oil Spill animation
The City has released a second oil spill modelling animation from Genwest Inc, this one shows what could happen if there was a 16 million litre oil spill at Second Narrows.