The trans mountain pipeline (TMX) project involves the twinning of a decades old pipeline from the oil centre of Edmonton Alberta, over the Rocky mountains to a Pacific Ocean port terminal near Vancouver.
The new pipeline would triple existing pipeline capacity in transporting Alberta’s oil sands crude to the port for shipment to Asian markets.
The project to twin the existing line in 2013, came under massive protests from a wide range of environmentalists and some Indigenous bands, and ongoing legal and regulatory challenges were such that to the American Kinder-Morgan firm behind the project backed out in 2018.
The Liberal government under Liberal leader Justin Trudeau stepped with public money to buy the line for $4.5 billion saying it is important for the nation and will provide substantial profits for the country. Completion of the new line is additionally estimated to have increased to over $12 billion.
The government takeover has also not stopped protests and legal challenges. Other issues that have since arisen for the project include some major insurers backing out.
Now a new study questions the viability of the line.
The Canadian Centre for Policy Alternatives is a non-partisan think tank on public policy issues, sometimes described as ‘left leaning’. Today it released a report called, Reassessment of Need for the Trans Mountain Pipeline Expansion Project.
It says government claims that bringing Canadian crude to the Pacific for shipment to Asia will provide greater profit than current pipelines to the US, are no longer true, and in fact will result in a loss of $4-$6 a barrel. It notes that presently most of the oil shipped through the existing line is already going to the U.S which has more than half the world’s refining capacity.
- RCI: Jan 28:20 Pipeline project clears one hurdle but divides Canadians
- RCI Jul 24/20: A major setback for the trans-mountain pipeline
- RCI: Sep 15/20: The end of peak oil demand?
The report notes that currently there is a glut of oil on the market, and that Asia has limited refining capacity. It also notes the increased capacity would also make Canada’s 2050 commitment to net-zero greenhouse gas emissions impossible” by incentivizing additional oil production growth”.
The report notes that the completion of Enbridge’s Line 3 and Mainline gives enough capacity for Canadian exports. Author Hughes also says the $12.6 billion would be better spent on emissions reductions. He adds the Liberal government has no plans on how to meet 2030 emissions reductions let alone the 2050 target and the claim that a completed TMX will help fund projects to reduce emissions is not viable.
Adding to that are other analyses, such as that by oil and gas giant BP which is reducing their own investment in petroleum and shifting toward renewables sayin they believe peak demand for oil has been reached and will begin a long slow decline in years ahead.
The government has said the pipeline has earned $29 million in net revenues since purchase. The twinning of the existing line is expected to be completed by the end of 2022.
- CBC: Trans Mountain expansion may not be economically viable, says think tank report
- CBC: T Gunton: Oct 15/20: Latest oil demand forecast raises questions about economic wisdom of Trans Mountain pipeline expansion
- CTV: T Fikowski: Oct 29.20: Report says TMX ‘not needed’; Ottawa should reassess the project