Vancouver harbour's Second Narrows bridges
Many are celebrating the start of increased exports of crude oil from the federal acquisition and expansion of the Trans Mountain pipeline system.
Not so fast!
The issues with the federal government’s Trans Mountain acquisition and expansion are far greater than just its purported effects on climate.
First, the cost. The total cost of the Trans Mountain project—$4.5 billion to buy the existing system, much more than $1 billion on years of accumulated loan interest on the purchase loan and construction bonds, more than $34 billion in construction costs, and at least $12 billion to replace, sooner rather than later, the existing 71-year-old pipeline—will be more than $50 billion.
No one, not anyone, except perhaps taxpayers, will pay the full price to acquire this boondoggle the most expensive in Canadian history.
Second, the potential liabilities. The total liability—of a dilbit spill into the Fraser River, or onto the salmon grounds of the Fraser Delta, or into Salish Sea/Gulf Islands/Puget Sound waters on whose shores live seven million; of a tanker collision with a passenger ferry, cruise ship, other vessel, or the CP Rail or Trans Canada Highway bridges over the Second Narrows; or a conflagration at the 5.6 million barrel (a volume 100 times larger than the oil carried by the Lac-Mégantic train) tank farm on the side of steep Burnaby Mountain just above the densely-populated city of Burnaby and just below the Simon Fraser University campus whose only two escape routes cross just a few meters above the tank farm—is almost incalculable!
Third, the commercial failure. Pipeline tariffs on the expanded Trans Mountain system will be four times higher than existing tariffs. In 2023, the tariff for heavy crude on Trans Mountain’s old line was $19.83 per cu. meter, or $3.15 per barrel. According to Trans Mountain’s Interim Tariff 117 effective May 1, 2024, the pipeline toll for heavy crude will be $85.24 per cu. meter, or $12.51 per barrel. Then add various surcharges, plus the fee for loading onto tankers, and then add the uncompetitive higher shipping cost for using tankers whose size is limited by shallow waters under Vancouver harbour’s Second Narrows bridges.
Second, the potential liabilities. The total liability—of a dilbit spill into the Fraser River, or onto the salmon grounds of the Fraser Delta, or into Salish Sea/Gulf Islands/Puget Sound waters on whose shores live seven million; of a tanker collision with a passenger ferry, cruise ship, other vessel, or the CP Rail or Trans Canada Highway bridges over the Second Narrows; or a conflagration at the 5.6 million barrel (a volume 100 times larger than the oil carried by the Lac-Mégantic train) tank farm on the side of steep Burnaby Mountain just above the densely-populated city of Burnaby and just below the Simon Fraser University campus whose only two escape routes cross just a few meters above the tank farm—is almost incalculable!
Third, the commercial failure. Pipeline tariffs on the expanded Trans Mountain system will be four times higher than existing tariffs. In 2023, the tariff for heavy crude on Trans Mountain’s old line was $19.83 per cu. meter, or $3.15 per barrel. According to Trans Mountain’s Interim Tariff 117 effective May 1, 2024, the pipeline toll for heavy crude will be $85.24 per cu. meter, or $12.51 per barrel. Then add various surcharges, plus the fee for loading onto tankers, and then add the uncompetitive higher shipping cost for using tankers whose size is limited by shallow waters under Vancouver harbour’s Second Narrows bridges.
These higher tariffs will not only reduce any competitive advantage of oil sands dilbit exports and oil sands company export profits, but they are sure to further increase the already highest fuel prices in Canada in B.C.’s Lower Mainland and Islands, and in the State of Washington which imports a significant amount of crude oil using the Puget Sound Pipeline extension of the Trans Mountain pipeline—and then exports refined products like jet fuel back to B.C.
Fourth, the nonsensical ecological contradictions. The Liberal government of Justin Trudeau imposed an oil tanker ban but only on B.C.’s north coast—not on B.C.’s crowded south coast, or in the equally ecologically-sensitive Bay of Fundy, the Gulf of St. Lawrence and the St. Lawrence River, or near the Grand Banks of Newfoundland.
Fifth, the lost opportunities. A two million barrel per day oil pipeline, the Eagle Spirit proposal that was supported by multiple First Nations, could have been built at less financial cost and ecological risk in a highly efficient energy corridor also containing natural gas and gas liquids pipelines, as well as green hydropower to make Canadian LNG exports the greenest on Earth, to Prince Rupert—the safest location for an oil terminal on all of Canada’s west coast.
But that was made impossible by Justin Trudeau’s oil tanker ban.
Go ahead, celebrate another Justin Trudeau fiscal, commercial, environmental, and ecological failure built in the face of an exhaustive federal study, “Potential Pacific Coast Oil Ports: A Comparative Environmental Risk Analysis,” that ranked the Trans Mountain pipeline system’s Burnaby marine oil terminal location the least safe on all of Canada’s west coast!
I can’t help but wonder if the federal plan was actually to ensure that this would be the last oil pipeline ever built in Canada.
Mike Priaro, former Life Member, Association of Professional Engineers and Geoscientists of Alberta
Calgary
May 16, 2024
