opinion
The Trans Mountain pipeline expansion is a disaster for everyone but Alberta
Gary Mason
National affairs columnist
It isn’t difficult to see why so many Albertans think poorly of Prime Minister Justin Trudeau and his federal Liberals. It’s a mindset drilled into them almost every day.
Premier Danielle Smith can barely conceal her contempt for the PM. Neither can most of her ministers. They seemingly have carte blanche to disparage Mr. Trudeau using any language they wish.
The other day, Jason Nixon – Alberta’s cabinet minister responsible for seniors, community and social services – chatted with Calgary columnist Rick Bell about what a menace the Prime Minister is to the province. His words were about as incendiary and, frankly, delusional, as you’ll find coming from the mouth of a Canadian politician.
He accused Mr. Trudeau of wanting to break up the country. He said Albertans were sick of the “abuse†and “disgusted†and “horrified†by the “continued attack on the very way of life we live.â€
“He’s trying to force his ideological views down the throats of Albertans … he’s trying to destroy how we make a living.â€
There were other comments equally as untethered from reality but you get the idea. Mr. Trudeau is trying to kill Alberta and its oil industry because he is a woke environmentalist singularly focused on climate change at the expense of everything else. Blah, blah, blah.
There is one story people like Ms. Smith and Mr. Nixon don’t talk about: the Trans Mountain pipeline expansion. That would be the same project Mr. Trudeau rescued in 2018 after the original owners, Kinder Morgan, decided they wanted no part of it. Rather than see the undertaking get mothballed, the Prime Minister stepped in and rescued it from imminent death, despite the deep reservations of many in his own government, not to mention broad swaths of the country itself.
Mr. Trudeau said the project was in the “national interest.†What that meant was, if it didn’t go ahead, Alberta would freak out and claim the country was out to get them – again. This, despite the legitimate concerns of environmentalists.
Trans Mountain, the company managing the project, estimates the pipeline will generate 630 tonnes of carbon dioxide annually, largely due to the electricity needed to power the compressor stations. This does not include the emissions produced when the oil being transported is eventually burned.
The project is now nearing completion – wildly overbudget. What was supposed to cost $7.4-billion when Ottawa took it over will now cost $30.9-billion. It will be shocking if the final number isn’t higher.
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It’s hard to envision Ottawa ever recouping its investment. Companies with locked-in contracts to ship oil through the pipeline are protected from any overruns. In other words, those costs can’t be passed along to the users. In a report, the Parliamentary Budget Officer concluded that the pipeline would not be profitable at a construction cost of $21.4-billion – a number long since passed.
Most believe the tolls that Trans Mountain is planning to charge shippers are too low to pay for operations. The Tsleil-Waututh Nation, which has taken an active interest in the pipeline given that it crosses its land, says the tolls being proposed would leave Ottawa $16.2-billion in the hole.
A number of economists who have looked at the current landscape can’t imagine a scenario in which the federal government isn’t forced to write off a big chunk of debt. This would make it a multi-billion-dollar subsidy of the oil industry – the same industry through which Jason Nixon insists Mr. Trudeau is trying to drive a stake.
Goodness knows oil companies could use a break. Last week, Shell reported second-quarter earnings of US$5.1-billion. Who wouldn’t be seeking corporate handouts after making that paltry amount?
The Trans Mountain pipeline expansion was supposed to allow Alberta oil to reach foreign markets like China. Except Asia will likely not have any interest in oil from Canada as long as it can get it at a discount from Russia. So the oil from our new pipeline will mostly go to the U.S., where most of Alberta oil goes now anyway. So much for best laid plans.
What won’t change is the untold billions the pipeline will deliver to the Alberta economy in the form of royalties. I’m sure politicians like Jason Nixon will heap unfettered praise on Mr. Trudeau for being the architect of their good fortune. Or not.
More likely, Mr. Trudeau will continue to be vilified by the province’s politicians looking to score cheap points with constituents by telling them the same lies they’ve been telling for years. The truth is, Alberta is about to hit the motherlode, again, this time because of a pipeline Mr. Trudeau had built and which Canadians will pay for – in more ways than one.
The Trans Mountain pipeline expansion is a disaster for everyone but Alberta
Gary Mason
National affairs columnist
It isn’t difficult to see why so many Albertans think poorly of Prime Minister Justin Trudeau and his federal Liberals. It’s a mindset drilled into them almost every day.
Premier Danielle Smith can barely conceal her contempt for the PM. Neither can most of her ministers. They seemingly have carte blanche to disparage Mr. Trudeau using any language they wish.
The other day, Jason Nixon – Alberta’s cabinet minister responsible for seniors, community and social services – chatted with Calgary columnist Rick Bell about what a menace the Prime Minister is to the province. His words were about as incendiary and, frankly, delusional, as you’ll find coming from the mouth of a Canadian politician.
He accused Mr. Trudeau of wanting to break up the country. He said Albertans were sick of the “abuse†and “disgusted†and “horrified†by the “continued attack on the very way of life we live.â€
“He’s trying to force his ideological views down the throats of Albertans … he’s trying to destroy how we make a living.â€
There were other comments equally as untethered from reality but you get the idea. Mr. Trudeau is trying to kill Alberta and its oil industry because he is a woke environmentalist singularly focused on climate change at the expense of everything else. Blah, blah, blah.
There is one story people like Ms. Smith and Mr. Nixon don’t talk about: the Trans Mountain pipeline expansion. That would be the same project Mr. Trudeau rescued in 2018 after the original owners, Kinder Morgan, decided they wanted no part of it. Rather than see the undertaking get mothballed, the Prime Minister stepped in and rescued it from imminent death, despite the deep reservations of many in his own government, not to mention broad swaths of the country itself.
Mr. Trudeau said the project was in the “national interest.†What that meant was, if it didn’t go ahead, Alberta would freak out and claim the country was out to get them – again. This, despite the legitimate concerns of environmentalists.
Trans Mountain, the company managing the project, estimates the pipeline will generate 630 tonnes of carbon dioxide annually, largely due to the electricity needed to power the compressor stations. This does not include the emissions produced when the oil being transported is eventually burned.
The project is now nearing completion – wildly overbudget. What was supposed to cost $7.4-billion when Ottawa took it over will now cost $30.9-billion. It will be shocking if the final number isn’t higher.
Story continues below advertisement
It’s hard to envision Ottawa ever recouping its investment. Companies with locked-in contracts to ship oil through the pipeline are protected from any overruns. In other words, those costs can’t be passed along to the users. In a report, the Parliamentary Budget Officer concluded that the pipeline would not be profitable at a construction cost of $21.4-billion – a number long since passed.
Most believe the tolls that Trans Mountain is planning to charge shippers are too low to pay for operations. The Tsleil-Waututh Nation, which has taken an active interest in the pipeline given that it crosses its land, says the tolls being proposed would leave Ottawa $16.2-billion in the hole.
A number of economists who have looked at the current landscape can’t imagine a scenario in which the federal government isn’t forced to write off a big chunk of debt. This would make it a multi-billion-dollar subsidy of the oil industry – the same industry through which Jason Nixon insists Mr. Trudeau is trying to drive a stake.
Goodness knows oil companies could use a break. Last week, Shell reported second-quarter earnings of US$5.1-billion. Who wouldn’t be seeking corporate handouts after making that paltry amount?
The Trans Mountain pipeline expansion was supposed to allow Alberta oil to reach foreign markets like China. Except Asia will likely not have any interest in oil from Canada as long as it can get it at a discount from Russia. So the oil from our new pipeline will mostly go to the U.S., where most of Alberta oil goes now anyway. So much for best laid plans.
What won’t change is the untold billions the pipeline will deliver to the Alberta economy in the form of royalties. I’m sure politicians like Jason Nixon will heap unfettered praise on Mr. Trudeau for being the architect of their good fortune. Or not.
More likely, Mr. Trudeau will continue to be vilified by the province’s politicians looking to score cheap points with constituents by telling them the same lies they’ve been telling for years. The truth is, Alberta is about to hit the motherlode, again, this time because of a pipeline Mr. Trudeau had built and which Canadians will pay for – in more ways than one.
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