All posts by Arik Ligeti

Keystone pipeline brings Oklahoma oil, limited jobs

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Alberta oil exports to Oklahoma have shot up billions of dollars since the Keystone pipeline was completed in 2011, but the economic benefits for the southwest state remain limited, experts say.

An analysis of Industry Canada trade data shows oil exports from Alberta to Oklahoma reached $3.4 billion in 2012, up from only $33 million in 2008. The spike happened in 2011, the same year the second phase of the Keystone pipeline running from Nebraska to Cushing, Okla. was completed. Attention is now focused on the approval of the pipeline’s extension to Texas.

With so much oil flowing through to the state of Oklahoma, the economic benefits for the state have been touted by some studies and politicians. But two economics professors say that the financial benefits are mostly short-term construction jobs.

It’s impossible to say an increase in oil imports will cause a specific net benefit to Oklahoma’s economy, said Andrew Leach, an environmental economist and professor at the Alberta School of Business. He said jobs aren’t long-term, and the one’s that are long-term are relatively few and far between.

Leach said it’s important to ask if Oklahoma is obtaining oil through the Alberta pipeline at a cheaper rate than if it had pursued other options.

“If you look at these things in a vacuum it’s this pipeline or nothing,” Leach said. “If TransCanada didn’t apply someone else would have.”

While the pipeline might ease the flow of oil for Alberta’s oil producers, Leach said the warehouse-style transportation does not mean discount prices for importers like Oklahoma. Just because oil is being refined in the Cushing area, it doesn’t mean those refineries would have sat empty without the pipeline. “Nobody runs a refinery because of a pipeline – it’s built because of production capacity,” he said.

Oklahoma is currently Alberta’s sixth-biggest American state for oil exports, accounting for six per cent of exports to the country. Exports to Texas sit at under $1 billion, but that’s expected to change if the Keystone pipeline is completed.

Alberta’s oil sands will bring in anywhere between $55 and $132 million per year to Oklahoma’s economy, according to a study by the independent Canadian Energy Research Institute. That same report also said Alberta’s oil would create or preserve anywhere from 640 to 1,520 jobs per year.

But reports like these might not always be as accurate as they claim to be, said Matthew Rousu, an economics professor at Susquehanna University in Pennsylvania. Rousu’s research includes reviewing the accuracy of economic impact studies.

Matthew Rousu, economics professor at Susquehanna University.
Matthew Rousu, economics professor at Susquehanna University.

Rousu said Oklahoma may benefit from temporary construction jobs or ongoing maintenance work, but “the bigger benefit almost seems like it would go to Alberta and whoever is extracting in the province.”

Rousu said economic impact studies are often used to mislead the public for political or corporate gain. It’s also difficult to accurately predict future economic benefits.

“You can’t look at it and say, this refinery is now processing oil, therefore all jobs are coming from the pipeline,” Leach said. Preserving and creating jobs are two different things. There might be a demand for oil-related jobs in the area that would be filled irrespective of Keystone’s expansion, he said.

The pipeline is “certainly not a multi-digit or multi-percent impact” on Oklahoma’s GDP, Leach said.

One ward’s solution to reducing crime proves successful

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OTTAWA — Assaults in the Bay ward are on the decline, and one reason may be a local crime prevention initiative.

An analysis of Ottawa Police statistics shows there were 140 assaults reported in 2012, down from 207 five years ago. The overall crime rate against persons has dropped to 53 per 10,000 people, compared to 80 in 2008.

 
“We’re thrilled with how it played out,” says Nancy Worsfold, executive director of Crime Prevention Ottawa. The arms-length organization has been funding the United Neighbours project since it launched in 2007. The initiative is a community-based project which brings together institutions and community members to help resolve crime at the ground level.

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Nancy Worsfold, CPO executive director

United Neighbours was put into place when communities in the area were at a crossroads: a mix of long-time residents and new immigrants meant a cultural and social divide that needed solutions to solve crime issues. The Somali Fathers Association, Brittania Church and the local boys and girls club were among the groups to participate in the plan.

In 2007 the Pinecrest-Queensway area, which is contained within the Bay ward, was identified by United Neighbours as a problematic region. Resources were then allocated towards improving relationships between local institutions and the community. The results look positive.

Pinecrest-Queensway catchment area (courtesy of PQCHC)

Between 2006 and 2011, the crime rate against people and property dropped 27 per cent in the Pinecrest-Queensway catchment area, according to a CPO report. That number is based on Ottawa Police statistics adjusted to the boundaries of the catchment area.

While the Bay ward’s assault reports per capita might not reach the levels of other wards, its steady decline is noteworthy and may point to the benefits of local crime prevention programs. No idea is perfect and crime is far from a bygone issue in the ward, Worsfold cautions.

“From a police perspective I can see there is a lot of improvement in the area,” says Admir Minarolli, a community police officer in Bayshore.

Minarolli acts as a liaison between the community and police. He’s regularly involved in programming and helps put a face to the often faceless law enforcement. “What I tell people is if they want to talk to me, they can,” he says.

Minarolli says part of the police strategy is to encourage people to report crimes. He thinks that more people are reporting petty crimes like thefts as a result, which may point to the reason for a slight increase in property crime.

“We still encourage people to report so we can address not just the statistics but also allocate resources,” Minarolli says.

United Neighbours has brought together different interest groups, and held regular coffeehouses to discuss issues of concern to community members.

“It’s restored a sense of pride” in the community, Minarolli says.

There are 16 neighbourhood watch programs in the Bay ward, Minarolli says, but there can always be more. It’s this community-engagement approach that has gained a lot of traction in many enforcement and academic circles over the past few years.

“People come in and say, ‘Oh Bayshore, they say a few years ago it wasn’t good,’” Minarolli says. That perception has begun to change, say Minarolli and Worsfold. Community-driven programs have helped drive the change, and the statistics are their proof.

Meth charges on the rise in Quebec

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Meth possession charges in Quebec have grown at over three times the national rate, according to Statistics Canada crime data.

A total of 1,021 people were charged with methamphetamine possession in Quebec last year, accounting for over half the charges Canada-wide. Over 60 per cent of Canada’s meth trafficking charges also occurred in Quebec.

The increase can be attributed to increased production and a law enforcement crackdown, says Montreal-based criminal lawyer Zayid Al-Baghdadi.

“I certainly haven’t seen charges in the past and now I’m seeing it,” he says.

While Quebec has considerably outpaced any other province, charges for meth have been rising rapidly across Canada. There were fewer than 200 possession charges in 2008 nationwide. In 2012 that number sat just above 1,800.

“I think it’s still novel to a certain degree,” says Al-Baghdadi, whose clients include those charged with meth possession. “But there is more and more of it sort of surfacing.”

Al-Baghdadi has also noticed an increased sense of interest from the police and RCMP when it comes to tracking down meth labs in the province.

One reason Al-Baghdadi points to as a possible reason for the rise in trafficking is an ingredient contained in meth: pseudoephedrine. In Canada the substance is legal and can be bought off the shelf at any pharmacy, as opposed to the United States, where a perscription is often needed. Canada’s lack of red tape enables easier access to the products necessary for meth production.

It also means there is increased demand south of the border for Canadian-made meth, since it’s more difficult to obtain pseudoephedrine in the United States. Some Canadians are even exporting pseudoephedrine across the border to the United States, where it’s being used to create meth, Al-Baghdadi says.

Canadian authorities like the RCMP are beginning to co-operate more with American officials to curb trafficking, he says.

But the solution to the problem won’t come from arrests alone.

“Police just focus on reaction when we really have to engage in prevention,” says Irvin Waller, a criminology professor at the University of Ottawa.

“It’s very clear if the only thing you do is enforce drug laws, there is no sustainable impact on supply or demand,” Waller says.

Waller points to the “Saskatchewan model” as an example of successful drug prevention. That model combines prevention and enforcement, bringing law enforcement, communities and organizations together to address drug problems.

Yves Séguin is the director at Centre d’intervention et de prévention en toxicomanie de l’Outaouais (CIPTO). The Gatineau-based organization works to help treat and prevent substance abuse.

Séguin says he has seen a rise in gang activity over the past few years.

“They’re pushing products [like meth] and some people are trying something new,” he says.

While Séguin hasn’t seen a significant increase in people seeking treatment for meth addiction, the fact that it’s more available on the street may be a reason for the rise in charges.

As for why Quebec, and not any other province, has seen such a noticeable spike in meth charges, the answer remains unclear.

In British Columbia, another province notorious for meth activity, the numbers look very different. Last year fewer than 250 people were charged with possession and just 92 for trafficking.

Various police and justice departments in Quebec did not immediately respond to requests for comment.