Good for the Economy? An Ecological Economics Approach to Analyzing Alberta's Bitumen Industry

- The paper examines the evidence considered by government in approving a major bitumen project.
- The project was deemed “in the public interest,” based primarily on its economic benefits.
- The evidence does not demonstrate efficient allocation, just distribution, or sustainable scale.
- Several measures are available that could improve decision-making on such resource projects.

Competing claims about the economic, social and environmental impacts of bitumen projects make Alberta's oilsands industry highly contentious. This paper uses a case study of a major bitumen project, Shell Canada's Jackpine mine expansion, to examine the evidence considered by government decision-makers in the project approval process. The project was determined to be “in the public interest” based primarily on its economic benefits, despite significant adverse environmental and social impacts. The paper evaluates the evidence that was presented to support this decision, using three criteria drawn from ecological economics: efficient allocation, just distribution, and sustainable macroeconomic scale. It finds that the evidence presented is, in fact, insufficient to justify the project on any of the three criteria. Furthermore, other studies of the bitumen industry cast doubt on the likelihood that the project would satisfy these criteria if further analysis were conducted. It concludes by recommending several measures that could help to improve decision-making on bitumen projects in the future.