The Trans Mountain Pipeline Expansion Counterintuitive to Paris Agreement?

Spotlight Activity: The Trans Mountain Pipeline Expansion Counterintuitive to Paris Agreement?

An August 30th Federal Court of Appeal ruling halted this project by nullifying the license to move work forward. Inadequate consultation with Indigenous communities and environmental assessment impacts on increased tanker traffic on marine environment were the stated reasons. Prime Minister Trudeau responded September 5, that the government accepts the ruling and is looking at all options to get the construction back on track and new approvals issued.

The Trans Mountain expansion involves a twinning of an existing 1,150-kilometre pipeline (1953) between Edmonton, Alberta (AB), and Burnaby, British Columbia (BC). It adds 980 kilometres of new pipeline and nearly triples its capacity from 300,000 to an estimated 890,000 barrels a day; it increases traffic along BC’s coast to 34 tankers per month from 5 tankers. It is the only pipeline carrying AB crude to the West Coast, most to end up in tankers bound for Asia.

Ottawa approved the project in November 2016 and BC’s then Liberal government followed suit. The pipeline has been the centre of fractious arguments to regulate what flows through it since a change of BC government in July 2017. The new government seeks further measures given expected damage of tanker spills, pipeline leaks of diluted bitumen, and adverse climate impacts on fisheries, local ecosystems and tourism. The project also faces opposition from activists and some Indigenous groups. A paradox is noted though in that AB heavy oil production, in part is powered by cheap natural gas to dilute the heavy oil or bitumen for the pipeline, of which northeast BC in particular, benefitting from provincial subsidies, is a preferred supplier to AB.

AB sees the pipeline as critical given price fluctuations, bottlenecks and desire for new markets. Economic gains are almost entirely in AB while BC bears much environmental risk. 84 million tonnes of CO2 yearly or 2.5 billion tonnes over 30 years are expected. Construction is estimated at one million tonnes of CO2, (land clearing) plus marine shipping, 68 kilotons CO2 eq per year. Given a potential 150-year lifespan, increased emissions as surface bitumen becomes scarcer, transport, and global impacts, climate calculations should be extrapolated out to at least 2050.

As government talks dragged on, on April 8 Kinder Morgan (KM ) announced it would stop all non-essential work saying the legal disputes put the line’s financial viability and continuity at risk. Ottawa offered to buy 51% of the project. However, KM did not see this solving the uncertainty of BC’s attempts to stop the project. On April 30, they said no but offered to sell 100% of the project to Canada instead for $6.5 billion. Armed with a financial analysis, Canada offered $3.85 billion. KM’s Board rejected the offer as “below the valuation” of assets, and counter-offered with $4.5 billion. Ottawa accepted with plans to re-privatize the pipeline by August. KM worked with Ottawa to identify another buyer given KM’s deadline of July 22. KM then took Ottawa’s offer to its shareholders on August 30th. The sale was approved just minutes after the Court of Appeal’s decision to quash the pipeline permits. Separate to construction, $7.4 billion or more is expected if construction is delayed. The purchase may also be subject to US approval (includes the Puget Sound pipeline). As well, delays may influence continuation given a pending Canada election set for next fall.

To read more details, visit https://www.ceaa.gc.ca/050/documents/p80061/116524E.pdf

Status: Standing Still

The federal government supports this improved access to new markets, and better pricing. This expansion “was always a trade-off” for introducing carbon pricing in AB. Issues are extensive, as prioritized by journalist Lynne Quarmby: given use of public funds, open pit mining removing boreal forests, bitumen processes being energy-intensive and toxic, using vast quantities of water from the Athabasca River, fed by a rapidly retreating glacier, acres of toxic tailing ponds, Indigenous people subjected to pollution, 13 spills already since KM took over in 2005, a tank farm of flammable materials in the middle of Burnaby, tankers passing through the Salish Sea, home to resident Orca whales—versus—growing the economy. Also, non-conventional fossil fuels that require almost as much energy to recover as they yield are argued as not efficient or feasible anymore.

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Tel: 819-938-3860

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