The bill for the Trans Mountain pipeline expansion project is still climbing. According to an update released on Friday, the total cost of the pipeline to export tar sands oil will reach $30.9 billion. When the Trudeau government bought the project in 2018, the bill was estimated at $7.4 billion. Finance Minister Chrystia Freeland nevertheless reiterated that the project constitutes “an investment in the national interest”.
Last year, Trans Mountain Corporation (TMC) had already revised the bill, which had then risen to 21.4 billion dollars. With the new revision announced Friday, we see that the bill for the construction of the new pipeline from Alberta to the coasts of British Columbia has quadrupled since the takeover, for 4.5 billion dollars, of the project of the Texas oil company Kinder Morgan.
According to a press release, “many factors” would explain this significant increase in costs, “including the commitment made by Trans Mountain to ensure the safety of the project and communities, the protection of important sites on the cultural plan for Aboriginal peoples, environmental preservation and building a quality long-term pipeline”.
As for the schedule, TMC estimates that “80% of the construction work for the project is complete”. It is expected that all “mechanical aspects” will be completed by the end of 2023. The transport of crude in the new pipeline should therefore begin during the first quarter of 2024.
TMC also indicated on Friday that the capacity offered by the project is mainly distributed among 11 shippers who have made commitments “to use 80% of the available capacity under long-term firm transmission contracts for a period 15 and 20 years old. At a time when the planet must reduce its dependence on fossil fuels, the company is therefore guaranteed to be able to transport at least 260 million barrels of oil annually, for several years.
“National interest”
When completed, the pipeline duo (which includes a pipeline built in 1953) will transport 890,000 barrels of Alberta crude oil per day, or 325 million barrels per year, to a port near Vancouver. The project will therefore triple the flow of oil and increase the number of tankers loaded in the Vancouver area sevenfold, from 5 to 34 ships per month. These vessels will notably pass through the critical habitat of the Southern Resident killer whales, a population of cetaceans on the verge of extinction.
If TMC manages to use the pipeline at full capacity, i.e. to transport 325 million barrels per day, the oil that would be exported each year thanks to this infrastructure could produce more than 125 million tonnes of greenhouse gases (GHGs) annually. . This calculation only takes into account the emissions during the use of the resource. According to data from the United States Environmental Protection Agency, each barrel of oil burned generates 0.43 tonnes of GHGs and currently 90% of the oil used in the world is burned.
Reacting to the update of the fossil fuel export project, the Minister of Finance, Chrystia Freeland, wanted to be reassuring. “The federal government acquired TMC and the Trans Mountain expansion project in 2018, knowing that it was making an important and necessary investment – an investment in the national interest that will increase the sovereignty and resilience of Canada and the Canadian economy,” she said in a written statement.
“Once completed, the Trans Mountain Expansion Project will allow Canada to receive fair market value for its resources as we work to achieve carbon neutrality by 2050,” she added.
” Net loss “
Last June, however, the Parliamentary Budget Officer released a report that concluded that the pipeline expansion will not be profitable for the federal government. “The government’s 2018 decision to acquire, expand, operate and then divest the assets of the Trans Mountain Pipeline System will result in a net loss to the federal government,” the document read. This report was based on the cost estimated at the time at $21.4 billion.
According to a study published in the spring of 2021 (nearly two years before Friday’s update) by a team of researchers at Simon Fraser University in British Columbia, Canadians stand to lose more than $12 billion with the Trans Mountain pipeline expansion project. According to the different scenarios assessed, the losses could vary from 3.2 billion to more than 18.5 billion. Whatever the scenario, none has demonstrated that the project could generate a benefit for the government.
Greenpeace spokesman Patrick Bonin reiterated on Friday that the project is a mistake. “The purchase of this pipeline is one of the worst infrastructure decisions ever made by the Canadian government. Trans Mountain has always been a disaster when it comes to the climate crisis, but it is now clear that it is an economic crime as 30 billion Canadian dollars of public funds have been stolen and cannot be used to fund real solutions. climatic. »
The Trudeau government had to go all the way to the Supreme Court to defend this development project in favor of the fossil fuel industry, due to opposition from British Columbia. The Supreme Court finally ruled in January 2020 that only the federal government could regulate the interprovincial transport of oil, in particular with a view to its export to foreign markets.