Trudeau Approves Trans Mountain Pipeline

FRIDAY, JUNE 21, 2019

On Tuesday (June 18), Canada Prime Minister Justin Trudeau once again approved the Trans Mountain Pipeline, a pipeline expansion that has drawn opposition from concerned parties. Trudeau’s government first approved the pipeline in 2016.

The expansion, to run from Alberta to Vancouver, would move nearly a million barrels of oil a day.

Project History

The Trans Mountain Pipeline Expansion would, according to Kinder Morgan’s plans, run from Strathcona County, Alberta (near Edmonton), to a tanker port in Burnaby, British Columbia (near Vancouver), staying mostly alongside the current Trans Mountain Pipeline, built over 50 years ago.

The company noted that 73% of the pipeline would use the same right-of-way as the existing pipeline, 16% would follow other linear infrastructure rights-of-way, and 11% would require new right-of-way. The project involves 980 kilometers (609 miles) of new pipeline, and the reactivation of 193 kilometers of deactivated pipeline. It would expand the pipeline system's capacity from 300,000 to 890,000 barrels per day.

As of December 2017, Kinder Morgan anticipated the permitting process for its Trans Mountain expansion to take longer than originally expected, likely pushing back the oil pipeline’s completion until 2020.

In April 2018, Kinder Morgan announced the suspension of all non-essential activities and related spending connected to the Trans Mountain pipeline expansion project.

The decision stemmed from British Columbia’s resistance to the project, along with Kinder Morgan unwillingness to saddle shareholders with the additional risk that comes with construction costs ramping up from $200 million to $300 million a month.

Over a month later, the government of Canada announced that it would buy the pipeline in a CA$4.5 billion ($3.47 billion) deal that Trudeau hoped would expedite the stalled expansion of the pipeline in Alberta and British Columbia.

Recent Approval

During the news conference held earlier this week, Trudeau justified his decision by emphasizing that money made from the pipeline would be reinvested into green energy endeavors. The expansion is also a move to reduce dependency on selling petroleum to the States, as the pipeline will move product to the Pacific for delivery to Asia.

“Take a look at my record, and you’ll see that I’ve talked about the importance of developing our resources for a long time,” Trudeau said, adding that “in order to get the job done, Canada needed to have its act together on the environment.”

Opponents of the project have also pointed out that the risk of spillage will only increase. Bloomberg reported that the pipeline is a Canada-based solution for an industry facing capacity problems. Currently, the National Energy Board has 156 mandatory measures for the project to meet in order to move forward. There are also 16 recommendations to lessen the burden of marine shipping.

New lawsuits that crop up from the recent approval are also likely to continue to mire down the project. Currently, the government of British Columbia is looking to the Supreme Court for a ruling regarding limitations on oil shipments through the area.

Estimates for the cost of construction vary from C$7.4 billion to C$9.3 billion. Construction is slated to begin later this year.

“Fundamentally, this isn’t a choice between producing more conventional energy, or less,” Trudeau said. “It’s a choice about where we can sell it, and how we get it there safely.”


Tagged categories: Government; Infrastructure; NA; North America; Oil and Gas; Pipelines; Program/Project Management

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