Olivia Woods
On Friday, the federal government announced that it would no longer provide any financing for the expansion of the Trans Mountain oil pipeline. This comes after the company in charge of the project reported a 70% increase in costs, from $12.6 billion to $21.4 billion.
According to the Vancouver Sun, Trans Mountain Corp. would push back the completion date of the pipeline expansion by nine months. This is yet another loss for a project already afflicted by regulatory delays and opposition.
Minister Chrystia Freeland instructed TMC to seek financing from public debt markets or commercial institutions following this latest cost overrun. “I want to assure Canadians that there will be no additional public money invested in TMC,” she said.
By the third quarter of 2023, TMC plans to have completed the pipeline expansion, increasing the pipeline’s capacity from Alberta to the Pacific Coast up to 890,000 barrels per day.
COVID-19 epidemic and the extreme weather in British Columbia in November of 2021, when the Trans Mountain pipeline was temporarily shut down, are blamed for the increase in expenses.
In a statement released just hours after Trans Mountain Corp. released its new cost projections, Suncor Energy Inc. chief executive Mark Little said, “We remain fully supportive of this world-class infrastructure project which is vital to Canada’s long-term economic success and energy security.”
“While no one wants to see cost increases, they are often a fact of life with projects of this size and in this case were largely beyond Trans Mountain’s control,” said CEO of Cenovus Energy Inc., Alex Pourbaix, in another statement.
As of April 1, TMC’s CEO Ian Anderson will be retiring from the company and its board of directors. Considering the global pandemic, the wildfires, and the flooding in British Columbia during the past two years, he called the progress made “remarkable.”
“This project was crazy from a climate perspective when it was supposed to cost C$7.4 billion, but at C$21.4 billion and rising it is now economic madness,” said strategist for Greenpeace Canada, Keith Stewart, “It’s time to cut our losses on this white elephant.”
Original source material for this article taken from here
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