CRED releases new report

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A new report from CRED, How do pipeline spills impact property values?, reveals that an oil spill in Burrard Inlet or along BC’s south coast has the potential to negatively impact property values and cost jobs in real estate and property development, in areas both adjacent to spill sites as well as the surrounding region.

DOWNLOAD THE REPORT
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The research concludes that oil spills have direct and lasting impacts on property values. In particular, the report finds that:  

  • In eight documented cases, properties directly impacted by spills were significantly devalued
  • Nearby properties lost up to 8% of their value
  • Where homes relied on well water and the groundwater was contaminated, the value loss was permanent

The goal of the report is to increase access to information and support a transparent conversation around the economic risks and rewards of Kinder Morgan’s proposed new Trans Mountain pipeline. CRED is calling for an independent study of the economic risks of the proposal.

Downloadable image highlighting the report’s main conclusion:

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Business leaders react to the report’s findings

This report brings up important information and concerns. As planners, it’s our job to be aware of all potential risks to housing and land values. We hope that the government will take action to protect Vancouver’s market from the impacts of an oil spill.” – Blaire Chisholm, Planning Manager at Brook Pooni Associates

Vancouver is famous the world over for its natural beauty and pristine environment. This is the driving force behind all of our real estate-related industries. As a realtor, it is my responsibility to let my clients know about the risks they could face by buying a property near pipeline infrastructures.” – North Shore realtor and CRED advisor Dallas la Porta

As a realtor I have noticed that with the huge amount of negative publicity surrounding the expansion of this pipeline, people are on red alert and are very aware of the potential impacts of the pipeline on their properties. As a result, buyers will typically avoid a property anywhere near a pipeline and this does have a negative impact on values.” – Langley realtor Annabel Young

Read the full report here 

How do oil spills impact property values?

Photo credit: John Lehmann/The Globe and Mail

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The following is an excerpt from CRED’s upcoming report. To be notified when the report is launched and available for download, please contact us or join our mailing list.

Introduction

British Columbia’s property development sector is a significant driver of economic growth and an important source of employment. According to the Urban Development Institute, the sector is directly and indirectly responsible for over 220,000 jobs across the province, in areas from planning and construction to secondary supplier purchases. It makes a bigger contribution to provincial GDP than any other sector – more than natural gas, tourism, mining, forestry or film and television.

In the real estate sector, a sub-section of the property development industry, there are over 14,000 people working as realtors in Greater Vancouver, Vancouver Island and the Gulf Islands alone. The coastal real estate market is also important to private homeowners who gain value not only from a physical property but from its viewscape, proximity to waterfront and wilderness, and location in one of the world’s most liveable regions.

CRED is seeking to better understand the risks of an oil spill as part of an ongoing dialogue about the economic future of the region. Where are the best places to invest for future growth and prosperity? How can we safeguard our quality of life and support industries that will ensure long-term responsible development?

Real World Examples

To begin assessing risk, we gathered information on eight separate oil spills in the US and Canada. In three of the cases, the spills directly impacted properties and in two further cases, the proximity and perceived impact of the incidents devalued properties. In the final three cases, residents have claimed values losses but they have not yet been independently confirmed. 

Case study: Pepco Pipeline, Maryland, 2000

Loss in value: 11-12% in the 1st year

In 2000, a 3,800-barrel (120,000-gallon) oil spill in a suburb of Washington DC affected property near the Patuxent River. A study published in The Appraisal Journal in 2001 concluded that waterfront and beach-access homes were significantly and negatively affected by the spill.

In the year following the incident, home values within a 10-mile study area fell 11%. In addition, waterfront properties experienced reduced sales volume. According to real estate listing data, only three waterfront homes sold in the first sale season after the spill, a 40% decrease from the previous year. Because there was no substantial variation in regional markets, the study concluded that this decline was likely due to the spill.

This is a small excerpt from an upcoming CRED report on the link between oil spills and local property values. If you would like to read the whole report, please contact us or join our mailing list.

CRED reacts: must see real economic assessment before federal “pipeline push”

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On September 12th the federal government announced a new strategy to garner support in BC for the development of new oil pipelines.

In response, CRED is calling on the federal government to do a full assessment into the economic risks of new oil pipelines before pushing for their approval.

If the government is serious about protecting the long-term prosperity of Canadians, there needs to be a real consideration of whether new oil pipelines could hurt more jobs than they create. Over 80% of British Columbians work in the service sector – they need to know that their jobs aren’t at risk of similar impacts as seen after oil spills in the Gulf of Mexico and elsewhere across North America.

Meeru Dhalwala, co-owner of celebrated local restaurants Vij’s, Rangoli and Shanik and CRED advisor, says:

Tourism is a key source of income for our BC economy, particularly in Vancouver. I’ve read much on both sides of the argument and I am not at all convinced that the relatively few permanent jobs created by new oil pipelines are worth the massive risks–the most important risk being a major and expensive oil spill that would devastate our waters, wildlife and economy.”

UBC economist and CRED advisor Dr Rashid Sumaila echoes the need for a robust, independent cost-benefit analysis:

Any decision about whether to approve a new pipeline in BC needs to weigh economic costs against the benefits, especially for those of us who live and work along the pipeline and tanker routes.

How might a new pipeline impact the brand of Vancouver? How would it affect the price of gas in the lower mainland? If a significant spill were to occur, how many jobs would be lost? How much would an oil spill cost to clean up and who would pay? All of these questions need to be carefully considered before sending delegates to BC to campaign for approval.

Chevron denied pipeline priority – what does this mean?

Burnaby refinery

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The background

The Chevron refinery in Burnaby supplies about a third of the Lower Mainland’s gasoline and almost half of the Vancouver International Airport’s jet fuel. Most of the crude oil that it refines is received via the existing Kinder Morgan Trans Mountain pipeline; however, around 6,500 barrels currently arrive by rail each day and another 1,000 barrels per day (of 55,000 barrels per day total refining capacity) arrive via tanker truck.

The refinery would prefer to receive their crude oil entirely by pipeline, but in recent years they haven’t been able to secure enough space on the Trans Mountain pipeline. Using a rationing (apportionment) system, Kinder Morgan allocates shares of pipeline space out to different customers, including onto tankers for export.

Over the past few years, the percentage of pipeline apportionment given to the refinery has steadily declined in the face of increasing demand for oil for export. Chevron representatives have stated that non-pipeline forms of transportation make up the current shortfall but they come at an “extraordinary expense”.

The priority application

In 2012, Chevron applied to the National Energy Board (NEB) for preferential shipping space on the Trans Mountain pipeline. Last week, they were denied this application by the NEB, who stated that priority apportionment should only happen in extraordinary circumstances, and noted that Chevron needs to investigate other options, such as receiving crude oil via tanker into the Burnaby Westridge terminal, before resorting to priority destination designation.

How does this relate to the proposed new Trans Mountain pipeline?

There isn’t a direct relationship, since the new pipeline would be designed to transport diluted bitumen products, which the Chevron refinery is unable to process. However, the current situation might be an indication that export demand will increasingly trump local gasoline security.

How will the decision impact BC residents?

This decision might not have a noticeable impact on people living and working in BC. However, there is a risk that gasoline prices will increase at the pump if the Chevron refinery has to continue to rely on costly methods of importing crude oil. There’s also a chance that the Chevron refinery could be forced to close down if unable to secure a sufficient long-term supply of crude oil, leaving the Lower Mainland and Metro Vancouver reliant on gasoline imports.

This blog used quotes and information from several news articles, including the Burnaby LeaderReuters and CBC news.

More background and information can be found in our recent report “Assessing the risks of Kinder Morgan’s proposed new Trans Mountain pipeline”.

Photo credit: Andy Clark/Reuters

Innovating beyond the beaver: Credible Conversations with Michael Tippett

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast.

How to make a billion dollars: building an innovation economy

Michael Tippett, lifetime tech entrepreneur and current Director of New Products at Hootsuite, shares his thoughts on Canada’s economy past and present. Here’s his call to grow rather than harvest, create rather than extract, and to disrupt everything:

Credible Conversations panel: What does responsible economic dev’t mean in BC?

second panel

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

What does responsible economic development look like in BC?

The second experts’ panel explored economic alternatives: if we don’t built new oil pipelines, then what will our economy be based on instead? What industries should we nurture and support? Where will jobs, innovation and growth come from?

Moderated by Tara Mahoney from GenWhy Media, panelists included Linda Solomon from the Vancouver Observer, Bradley Shende from M2O Digital Agency and Rueben George from the Tsleil-Waututh Nation and TWN Wind Power.

Watch the full discussion here:

Credible Conversations panel: Will new oil pipelines benefit BC businesses?

Panel BC biz and pipelines

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

Will BC businesses benefit from new oil pipelines?

The first experts’ panel explored the economic impact of oil pipeline development on the province’s economy as a whole.

Moderated by Mandy Nahanee from the Squamish Nation, panelists included Karen Campbell, a staff lawyer with Ecojustice, Wes Regan, CEO of the Hastings Crossing Business Improvement Association, and Ngaio Hotte, an economist with the UBC Fisheries Economics Research Unit.

Watch the full discussion here:

And here are the slides used by Ngaio Hotte in her presentation. A more detailed analysis can be found on the UBC Fisheries Economics Research Unit “talking fish” blog.

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Credible Conversations presentation: BC economic snapshot + pipeline risks

CredConvo tech breakout group

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Our first Credible Conversations forum was held yesterday at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

To kick things off, here’s Liz McDowell giving a snapshot of BC’s economy and sharing some of CRED’s research to date:

And here is her presentation:

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Download the presentation slides

Notes from the real estate stream

Group question

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Our first Credible Conversations forum was held May 29th in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy on the west coast. 

*These are rough notes from the break-out sessions and are not meant to convey the opinions of all CRED members, or even all participants in the break-out group.

How could a new oil pipeline affect the real estate and property development industries?

Costs/risks:

  • Value of homes detrimentally impacted
  • Risk to property values
  • Affects Vancouver’s brand
  • Vancouver becoming a “petrol-port”
  • Health impacts – fumes from trucks and tankers
  • Harbour view affected

Benefits:

  • Kinder Morgan media plugs help raise awareness about the region
  • Kinder Morgan is reaching out to community regarding their proposal
  • Economic growth = population growth, more development, higher real estate values
  • Increased tax income to pipeline municipalities

Information needed:

  • How much do people value the Vancouver brand?
  • At what point is the impact too much to be allowable?
  • How long does it take to recover from an oil spill?
  • Is it possible to completely recover from an oil spill?
  • What are the economic costs of environmental degradation i.e. airshed quality?
  • Can Vancouver still be the “greenest city” if the project goes ahead?
  • How much would it cost to insure the pipeline without government coverage?
  • What / how many / for how long will new jobs be around for?
  • Will the pipeline attract people to move to Vancouver?
  • How would an earthquake affect the pipeline / tankers?

 

Notes from the tech, digital and creative stream

CredConvo tech breakout group

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Our first Credible Conversations forum was held May 29th in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy on the west coast. 

*These are rough notes from the break-out sessions and are not meant to convey the opinions of all CRED members, or even all participants in the break-out group.

How could a new oil pipeline affect the tech, digital and creative industries?

Costs / risks:

  • Environmental damage
  • Brand risk to Vancouver
  • In general, not enough is known on the risks to tech/film

Information needed:

  • Need reputable, accessible information available through a central resource
  • Need a clear outline of the risks
  • Case studies, surveys
  • More understanding of the alternatives / solutions
  • Solution-focused, with outline of clear actions to take
  • Look to industry to take a position
  • Key spokespeople
  • Information for parents: what are the risks to children?
  • Need tools: advocacy, outreach, socialization

Where are the opportunities to support this sector?

  • Education
  • Ride-share programs, electing to go car-free
  • Platforms for easy communication sharing that supports more low-carbon lifestyles
  • Crowd-funding opportunities for start-ups
  • Creative solutions
  • Online training platforms
  • Opportunities for online conversations that bring more people into the discussion and maintain it beyond events like this