Thomas Gunton: Trans Mountain pipeline is not needed


The prime minister’s announcement that he will subsidize the Trans Mountain Pipeline expansion project has added a new and disconcerting dimension to the pipeline debate.

The question is: Why should taxpayer funds be used to support a U.S. pipeline company that is putting B.C.’s coast at risk when there are Canadian pipeline companies capable of transporting Alberta oil to market without risking B.C.’s coast and without requiring any subsidy?

To understand how we got to this seemingly illogical decision, we need to go back a few years when oil markets were booming and it looked like we needed a large number of new pipeline projects. Five new projects, including Trans Mountain, were proposed during that boom time.

But then things changed. The oil market has weakened as the world transitions away from fossil fuels, and Alberta oil production forecasts have declined by about 1.5 million barrels per day (2014-2017), thus reducing the demand for new pipelines.

The Energy East pipeline connecting Alberta to eastern Canada was cancelled because of declining demand, and Enbridge’s Northern Gateway was rejected by the federal government. That leaves three new approved pipelines still on the table: Enbridge’s Line 3, Keystone XL, and Trans Mountain. In addition, Enbridge is proposing 0.5 million bpd of expansions to its existing pipeline.

The new capacity from these proposed expansions — without Trans Mountain — is 1.7 million bpd. But with the declining oil market, Alberta only needs between 0.5 and 1.3 million bpd of new capacity by 2030 (and likely closer to the lower end). Bottom line: There is more than enough new pipeline space proposed without building Trans Mountain.

Trans Mountain’s alleged advantage is that it connects to Asian markets, thus reducing dependency on the U.S. But much of the oil destined for Trans Mountain will go to the U.S., and the …read more

Source:: Vancouver Sun

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