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If Canada’s governments won’t push to get pipeline projects built, Canadians will be the poorer for it.

Canada’s overwhelming dependence on one market for its oil and gas exports comes with a serious price tag. Canadian Western Select crude oil sells at a substantially lower price than oil from other jurisdictions, such as West Texas Intermediary, Brent crude or Mexican Maya crude.

In 2016, Canadians were getting 25 to 30 percent less per barrel of oil sold into the United States than the price we would command if our oil could get to more lucrative world markets in Asia or Europe.

The end of 2017 delivered the bad news that the situation has only deteriorated and Canada’s price discount approached 50 percent.

Despite the approvals of Keystone XL pipeline and the Kinder Morgan Trans Mountain expansion, oil transport in Canada still faces significant congestion, and slow response by rail companies isn’t alleviating that bottleneck. As Reuters reports, export pipelines are near (or beyond) capacity, and stockpiles of oil are growing. No additional pipeline capacity is expected until at least 2019. Rail is slow to deploy because it’s both a more costly way to ship oil and Canadian shippers face a backlog of grain they also have to move.

The costs to Canadians – citizens and governments – are considerable. As The Fraser Institute calculated in 2016, if Canada could export an additional million barrels of oil to world markets, and get $60 a barrel for its oil (world price as of this writing was US$63.35), Canada would have netted an additional $4.2 billion in export revenues. With a 50 percent price discount, the situation is even worse today.

The oil price and volume of production drive the Alberta and Saskatchewan crude oil royalty formulas. The importance of price is underscored by the impacts of much lower prices on royalty revenues. In Alberta’s October 2015 budget, royalty revenues were projected to plunge to $1.5 billion in 2015-16 from $5 billion. Royalties from conventional oil production were estimated at $500 million compared with $2.2 billion in 2014-15.

And Saskatchewan’s February 2016 budget update projected oil royalty revenue of $347.9 million in fiscal 2015-16, 38.5 percent less than previously forecast. Again, the shortfall in government revenues can only worsen as the Canadian/U.S. price differential increases.

In the meantime, U.S. President Donald Trump has opened the spigot on U.S. oil and gas development. The U.S. Energy Information Administration estimates that in 2019 U.S. production will surpass 10.85 million barrels per day. That beats a previous record high of 10 million barrels per day last seen in 1970. Not only have federal lands been opened for oil prospecting and development, the doors have been flung open on parts of the Arctic National Wildlife Refuge and offshore development.

U.S. oil exports have also boomed since the ban on exports was lifted in 2015, rising from 400,000 to 2.13 million barrels a day in 2017. Increasingly, the U.S. will compete with Canada for oil export markets, while more of its domestic needs are met by its own producers.

And environmental groups such as Greenpeace and the Rainforest Action Network continue their crusades against the safe development and transport of Canada’s oil and gas resources.

Clearly, it’s critical to Canada’s energy exports that provincial and federal governments work to overcome entrenched resistance to pipeline construction with the same zeal as B.C. Premier John Horgan has pledged to oppose them “with every tool available.”

Lip service, which we’ve seen in plenty, isn’t nearly enough.

Kenneth Green is senior director of Natural Resource Studies at the Fraser Institute.

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