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Why Canada likely won’t need any more big new oil pipelines after Trans Mountain

Why Canada likely won’t need any more big new oil pipelines after Trans Mountain

Building of the Trans Mountain enlargement undertaking is ready to wrap up later this 12 months, and it’s seemingly the final new oil export pipeline the nation will ever want.

The pipeline has confronted many obstacles through the years, together with protests, court docket challenges and large value overruns. Final week, the price of the federally owned undertaking was up to date to greater than $30 billion.

Over the past decade, a number of different high-profile pipeline proposals have faltered, however the Trans Mountain enlargement is greater than 80 per cent constructed, and oil is predicted to start out transferring in early 2024.

As oil manufacturing progress slows in Alberta, some within the business suspect there received’t be a necessity for any extra new oil export pipelines.

“I feel we’ll be good,” Alex Pourbaix, president and CEO of Cenovus Vitality, stated in an interview.

“I don’t assume we’re going to see one other large-scale liquid pipeline coming ahead, definitely within the subsequent decade.”

Cenovus Vitality CEO Alex Pourbaix, proper, proven on the International Vitality Present in Calgary in June 2022, says there’s much less want for brand new oil pipelines as manufacturing progress slows. (Jeff McIntosh/The Canadian Press)

Protests, political battles, court docket challenges

When the Trans Mountain enlargement was first pitched greater than a decade in the past, the proposal appeared comparatively simple, for the reason that undertaking would twin an current pipeline largely alongside the identical route. As well as, the pipeline wouldn’t cross a number of borders, operating from Alberta to British Columbia.

For the primary few years after the undertaking was introduced in 2012, it acquired little or no consideration — particularly because the highlight was on different pipeline proposals, corresponding to Northern Gateway, Vitality East and Keystone XL.

Protesters hold a black banner with orange letters that reads: 'Climate Leaders Don't Build Pipelines.'
Protesters against the Trans Mountain pipeline enlargement undertaking arrive at a park slightly below a development website in Burnaby, B.C., in March 2021. (Darryl Dyck/The Canadian Press)

Nonetheless, as these initiatives faltered and the Trans Mountain enlargement neared development, the scrutiny shortly adopted.

There have been protests from Indigenous communities and environmental advocates; political battles between Alberta and B.C.; regulator and court docket challenges; and plenty of different obstacles that brought about extra delays, uncertainty and bills.

The Trans Mountain undertaking was purchased by the federal authorities for $4.5 billion in 2018, after earlier proprietor Kinder Morgan Canada Ltd. — which was acquired by Pembina Pipeline Corp. in December 2019 — threatened to scrap the pipeline’s deliberate enlargement undertaking within the face of environmental opposition, authorized challenges and political danger.

The price of the undertaking has escalated through the years due to a number of elements, together with international inflation and provide chain challenges, extreme floods in British Columbia, route adjustments, difficult terrain and safety bills.

Pipelines near capability

Regardless of the entire issues, specialists say the financial case for the pipeline stays, since it should enable Canadian oil to succeed in the coast and fetch a greater value than delivery it to the USA, the place nearly all of Canadian oil flows.

The business additionally wants one other export channel, since current pipelines are operating out of area.

“We’re fairly shut,” stated, Kevin Birn, a vice-president with S&P International Commodity Insights in Calgary, who expects the Trans Mountain enlargement to be stuffed with oil when it’s up and operating.

A worker wearing a yellow hard hat and a safety vest stands on a pile of dirt at a construction site near a crane.
A employee appears to be like on as development continues on the Trans Mountain pipeline enlargement undertaking in Burnaby, B.C., in March 2021. The undertaking was bought by the federal authorities for $4.5 billion in 2018, within the face of environmental opposition, authorized challenges and political danger. (Darryl Dyck/The Canadian Press)

“Total, by means of the again finish of this decade, we see the complete western Canadian system — even together with some expansions and optimizations that haven’t occurred — operating north of 90 per cent utilization. And that’s nicely into the 2030s with the completion of TMX.”

Birn stated he additionally doubts that the nation will see the development of any extra massive oil pipelines — not solely as a result of there received’t be sufficient oil manufacturing to justify the necessity, however as a result of the entire issues with the Trans Mountain enlargement would make a pipeline developer cautious and hesitant to construct an enormous undertaking in Canada.

In the meantime, for the principle opponents of Trans Mountain, there’s some solace, contemplating how a lot has modified in Canada over the past decade when it comes to pure sources growth, environmental coverage and Indigenous rights.

“They form of misplaced the battle however received the conflict,” stated George Hoberg, a professor on the Faculty of Public Coverage and International Affairs on the College of British Columbia in Vancouver.

He documented the pipeline and a number of other different initiatives in his e-book The Resistance Dilemma: Place-Primarily based Actions and the Local weather Disaster.

The federal authorities was capable of leverage its assist for Trans Mountain to get Alberta to hitch the Pan-Canadian Framework on Clear Progress and Local weather Change, Hoberg stated, whereas Indigenous teams have gained extra rights after Ottawa adopted the United Nations Declaration on the Rights of Indigenous Peoples.

Heavy machinery moves pipelines during the night.
Building on the Trans Mountain enlargement undertaking is proven close to Hope, B.C., in October 2021. The prevailing pipeline, which runs for 1,150 kilometres, carries 300,000 barrels of oil per day. The enlargement will increase the every day output to 890,000 barrels. (Jonathan Hayward/The Canadian Press)

Even with out new oil export pipelines proposed once more within the nation, specialists say there’ll nonetheless be battle over the continued operation of current oil infrastructure, in addition to the event of latest pure gasoline, carbon dioxide and hydrogen pipelines. The development of latest electrical energy transmission strains will trigger comparable controversy, Hoberg stated.

“They’re pipelines for electrons, and so they have the identical options as a pipeline within the sense that they’re lengthy, linear infrastructure,” he stated.

Possession comes subsequent

As development of the Trans Mountain enlargement nears the end line, the main target will quickly flip to the undertaking’s possession. The federal Liberal authorities has stated it might promote the pipeline however solely after it’s sure the undertaking will probably be accomplished.

For just a few years, some Indigenous-led teams have been making ready to make bids.

“TMX could be very polarizing due to the safety of the atmosphere,” Stephen Buffalo, president and CEO of the Indian Useful resource Council, stated, noting the chance of a spill.

If Indigenous teams have an possession stake within the undertaking, there’s extra accountability and involvement by native communities to make sure environmental safety, he stated.

The prevailing Trans Mountain pipeline, which runs for 1,150 kilometres, carries 300,000 barrels of oil per day and is the one pipeline system transporting oil from Alberta to the West Coast.

The enlargement will increase the every day output to 890,000 barrels.