The Nechako region will have more of a direct financial benefit than any other region in the province if the proposed Northern Gateway pipeline is built, according to a new study.
A report released this week by the Canadian Energy Research Institute (CERI) said Nechako can expect to see upwards of $655 million in direct gross domestic product benefit over 25 years if the pipeline is built, with the the North Coast region a close second at $575 million.
The Cariboo region is a little lower, but since Prince George is expected to benefit with some indirect and induced benefits because of its position as a regional service centre, the region's total benefit will be pushed to just under $500 million.
Dinara Millington, one of the authors of the report, said it was important to break down the benefits regionally to give a better idea how each sector of the province will benefit.
"This was done according to what the approximate mileage would be through each region and that would be multiplied by what types of material would need," she said.
For instance, she said if a particular region required more manned pumping stations, it will see higher benefits.
The overwhelming majority of all the financial windfall for the three regions will come during the construction phase. If the project is on track, the most lucrative years would be 2016-17.
The Northern Gateway project is in the midst of an environmental assessment which isn't expected to be completed until 2013 and is embroiled in a political dispute. The $6 billion project aims to connect Alberta's oilsands with the port of Kitimat, which will allow Canadian bitumen to be shipped to Asia.
However, the B.C. government has remained skeptical of the project due to possible environmental risks and has set out five conditions which must be met before it will consider approving the pipeline.
The report, titled Pacfic Acces: Asia-Directed Oil Pathways and their Economic Impacts, estimates B.C. will have receive a total of $4.7 billion in GDP benefits, significantly more than the $2.9 billion for Alberta. However that doesn't take into account the royalties Alberta will receive for the extraction of the bitumen.
One of the B.C.'s government's approval requirements is to ensure the pipeline provides adequate financial benefit to the province, based on the amount of environmental risk it would be taking on. However, Premier Christy Clark has so far refused to say just how much money her government believes is fair.
While the Northern and Interior regions of the province have the largest direct benefits, the Lower Mainland is a big winner overall when it comes to indirect and induced benefits, which are expected to total about $1.7 billion
"The reason they get the most indirect and induced GDP increases is because Vancouver is the most populous city in the province and because it's home to many financial and insurance benefits," Millington, the senior research director at CERI, said.
The report was based on the initial document Enbridge filed with the National Engery Board which estimated the project would cost $5.5 billion. Since then the energy giant has added an additional $500 million in safety measures, ranging from more pumping stations to thicker pipes. Millington said once those additions are factored in, there would likely be a slightly larger benefit for some regions.
