Busting myths about the Trans Mountain expansion

Trans Mountain pipeline oil gas energy
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Deborah JaremkoThis summer marks peak construction for the Trans Mountain Pipeline expansion project, with more than 13,500 people working on the project across Alberta and B.C.

False narratives continue to shadow this critical infrastructure project. Here’s a look at four central myths that get repeated and why they are wrong.

Myth: Trans Mountain expansion isn’t needed.

Fact: It is.

The case for the Trans Mountain expansion was strong before Russia invaded Ukraine, and now it’s even more vital.

The existing pipeline has been overbooked regularly for the last decade, debunking the claim that there’s no world demand for Canadian oil.

And despite all the talk of the energy transition, global oil demand is rising. The International Energy Agency (IEA) expects it to reach 101.3 million barrels per day next year, rising above consumption levels before the COVID-19 pandemic.

The IEA projects that oil demand will continue rising, to 103 million barrels per day in 2030 and stay at that level through 2050.

Canada’s allies are looking for solutions as they work to reduce reliance on Russian oil and gas. This includes President Joe Biden’s unsuccessful recent request for Saudi Arabia to increase production to help reduce U.S. gas prices.

When the Trans Mountain expansion comes online in 2023, it will add about 590,000 barrels per day of capacity for Canadian oil to reach global markets, helping relieve an increasingly tight supply/demand balance.

Myth: Trans Mountain isn’t supported by Indigenous people.

Fact: It is benefiting Indigenous communities.

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The project has reached mutual benefit agreements with 69 Indigenous communities along its route.

These agreements, which can include financial compensation, contracting, employment, training and environmental protection, are valued at more than $600 million.

So far, more than 2,100 Indigenous people, or about 11 per cent of the total workforce, have worked on the project. More than $3.2 billion has been awarded to Indigenous businesses through more than 4,700 contracts – $1.3 billion in 2021 alone.

Multiple Indigenous groups – including Nesika Services, Project Reconciliation and Chinook Pathways – are also seeking equity ownership stakes in the project once the expansion is up and running.

Myth: Trans Mountain is harming Indigenous cultural resources.

Fact: Indigenous communities are guiding and monitoring development.

Indigenous monitors are working with Trans Mountain to ensure that traditional knowledge is incorporated into construction oversight, and to help minimize impacts to traditional land use and resources.

Forty-five Indigenous monitors were employed with the expansion at the end of 2021.

The operating pipeline and the expansion are also guided by the Indigenous Advisory and Monitoring Committee (IAMC), a group of 13 Indigenous and six senior federal representatives regularly participating in oversight with the Canada Energy Regulator, Fisheries and Oceans Canada, and Parks Canada.

Meanwhile, the expansion project is conducting the largest archeological program in Canadian history, informed by Indigenous communities.

Since 2012, more than 98 Indigenous groups have participated in archaeological fieldwork or provided traditional use information and traditional knowledge as part of the program, valued at $40 million so far.

Myth: Trans Mountain Expansion will be a financial loser.

Fact: Access to global markets will increase revenue for Canada.

Even with increased construction costs, the project will result in higher revenues for producers and the Canadian government because global customers will pay more for Canadian oil, says B.C.-based environmental scientist Blair King.

“It is simply getting paid more for the same product because you can now get it to a market that values it more,” King says. “It is pure cream which requires no further effort once the pipeline is built.”

According to Canada’s Parliamentary Budget Office (PBO), an increase of US$5 per barrel for Canadian heavy oil would add $6 billion to Canada’s economy over the course of one year.

On the global market, the Canadian heavy oil grade Western Canadian Select (WCS) is comparable to Dubai Fateh medium heavy from the Middle East, according to Phil Skolnick, an analyst with Eight Capital. In June, Dubai Fateh sold for an average of US$116 per barrel, about US$15 more than WCS.

Using the PBO estimate, that means that if the project were up and running and current prices were sustained for a year, the Trans Mountain expansion could help add up to $18 billion to the Canadian economy.

Deborah Jaremko is director of content for the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions.

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The opinions expressed by our columnists and contributors are theirs alone and do not inherently or expressly reflect the views of our publication.

© Troy Media
Troy Media is an editorial content provider to media outlets and its own hosted community news outlets across Canada.

By Deborah Jaremko

Deborah Jaremko leads content development for the Canadian Energy Centre, an independent provincial corporation that is primarily supported by the Government of Alberta’s industry-funded Technology, Innovation and Emissions Reduction (TIER) fund. Deborah is the former editor of jwnenergy.com and oilsands editor for the Daily Oil Bulletin. She was editor of Oilsands Review magazine from its founding in 2006 to its close in 2017.

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