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Energy

Transmountain Pipeline Expansion Project a success?

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5 minute read

From the Frontier Centre for Public Policy

By Chris Bloomer

 

The Transmountain Mountain Pipeline expansion project (TMEP) was completed on May 01, 2024. Its startup the following month ended an eleven-year saga of tectonic federal energy policy initiatives, climate change requirements, federal regulatory restructuring, and indigenous reconciliation. That it was finished at all is a triumph, but there was muted celebration.

The original proponent for TMEP was Kinder Morgan (KM), who filed its application with the federal energy regulator in 2013. The expansion would be constructed in the existing right of way of the existing pipeline and increase capacity from 300,000 barrels of oil and refined products to 890,000 barrels of oil per day. This included expansion of the existing dock and loading facilities. Protests began virtually the next day. The cost estimate at that time was $7.4 billion for the 1,150 km pipeline and related facilities. The federal regulator and the federal government approved the project in 2016.

Between 2016 and 2018, the intensity of the protests against TMEP and a new government formed in British Columbia that vowed it would use any means possible to make sure TMX would not be built created significant hurdles. KM warned that the protest’s impact and B.C.’s regulatory and legal challenges were creating significant uncertainty, and the project would be delayed at least a year, stopping all non-essential spending. Ultimately KM decided it would not continue with the project because of the increased execution risk and cost to complete the project that the legal and regulatory challenges, and increasing protests, posed.

The project’s shelving by KM led to the federal government acquiring all the Kinder Morgan assets, including TM for $4.7 billion in 2018. Construction then began in 2019.  The execution risks remained the same with the legal and regulatory challenges. They were compounded by a legal challenge to the substance of the federal government’s consultation with indigenous people, which was their constitutional duty. The courts agreed that the federal government had not met its constitutional duty to consult and ordered that it be redone. This led to further delays and in 2020 the cost estimate increased to $12.6 billion, then increased again to $21.4 billion in 2022. Ultimately, the federal regulator imposed 157 conditions on TMEP that it had to meet before it could operate.

COVID, extensive flooding and regulatory delays led to a further cost increase up to $30.9 billion in 2023. The final updated cost increased to $34 billion in 2024 due to labour costs, inflation, and materials delays.

The foregoing “Coles notes” version of events sets out the challenges endured by TMX as of Thursday, May 23, 2024. It also highlights that delays in a major project like TMEP have a massive impact on costs. But what gets lost in all this is that in 2013 KM, a public company, made a commercial decision to proceed with the project. There was and still is a huge market pull for the pipeline and the incremental oil volumes. There is huge economic and strategic value for Canada that will benefit all sectors of the economy and indigenous communities, who will most likely end with significant pipeline ownership.

Market access for Canada’s oil production in the Pacific markets will change the oil trading dynamics and value for Canadian production. Canada has the third largest oil reserves in the world. Canada is among the best in its class for environmental, safety, social and governance of its energy production. Canada is also among the best in pipeline construction and safety. So, who best to execute a monumental project like TMX?

We need to reflect and admire the skill, diligence, and perseverance of everyone involved with bringing to fruition TMX as a world class, state of the art major piece of energy infrastructure.

Yes, TMX is a success but the process through which it had to persevere was a failure and we should reflect and learn from it. In the end, despite the final cost, Canada will reap the economic benefits from TMX for decades because the world needs oil and Canada has lots of it.

Chris Bloomer is a board member of FCPP and the former president and CEO of the Canadian Energy Pipeline Association. He has held senior executive positions in the energy industry in Canada and internationally.

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Business

Carney’s Honeymoon Phase Enters a ‘Make-or-Break’ Week

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From the National Citizens Coalition 

The National Citizens Coalition (NCC) is sounding the alarm on a critical week for the Carney government, which, despite enjoying an unearned honeymoon in the polls, has delivered zero results for everyday Canadians. As the G7 summit looms large and the House of Commons prepares to adjourn, this is a make-or-break moment for Prime Minister Mark Carney to prove his government is more than empty promises. Canadians are watching, and the NCC is calling out the glaring failures that threaten a grim summer of economic decline, and continued crime, chaos, and rising unemployment.

Housing Minister Gregor Robertson Caught in $10.85 Million Scandal

Recent revelations from Blacklock’s Reporter expose Housing Minister Gregor Robertson’s attempt to conceal $10.85 million in personal property investments during Commons questioning. This shocking lack of transparency from the minister tasked with addressing Canada’s housing crisis raises serious questions about his integrity and ability to prioritize Canadians struggling with skyrocketing costs. While Robertson dodges accountability, and Carney apparently scoffs at providing housing relief to millions suffering under a Liberal-made crisis, young professionals and young families are wondering if they’ll ever have a chance to own a home bigger than Canada’s much-maligned supply of ‘dog-crate condos.’

The NCC demands a full ethics investigation, the resignation of Gregor Robertson — who, as one of the architects of the Vancouver housing crisis, should have never been handed this file to begin with — and immediate action to restore trust in this critical portfolio.

Pipeline Delays and Provincial Obstruction Threaten Economic Growth

The Carney government’s inaction on pipelines is stalling Canada’s economic potential. Despite promises of “nation-building projects,” British Columbia and Quebec continue to block and veto critical energy infrastructure, with Carney failing to assert federal leadership. His vague talk of “consensus” and “decarbonized” barrels has led to zero progress, leaving Alberta’s economy in limbo and Canadians facing higher energy costs. With no clear plan to advance projects, the government is squandering opportunities to create jobs and secure energy sovereignty. The NCC urges Carney to act decisively this week to break the provincial logjam and deliver results.

Immigration Chaos: Lena Diab’s Unchecked Honour System Fails Canadians

Immigration Minister Lena Diab’s reliance on an ‘honour system’ for millions of temporary visitors with expiring visas is a recipe for disaster. As Canada grapples with unsustainable immigration levels, Diab’s apparent plan for millions of temporary workers and failed ‘diploma mill’ attendees assumes compliance without enforcement, ignoring the high-propensity for fraud, and the ongoing and urgent strain on housing, healthcare, and public services. The Liberals’ Strong Borders Act promises reform, but its loaded with unnecessary overreach and vague measures.

A lack of urgency leaves Canadians vulnerable to further crime, chaos, closed emergency rooms, high rents, and failing infrastructure. With immigration continuing to spiral out of control, the NCC calls for concrete action to drastically lower immigration targets, expedite deportations, and prioritize Canadian citizens and the record amounts of unemployed before the House adjourns.

Canadians Deserve Results, Not More Hollow “Elbows up” or “Team Canada” Rhetoric

This week’s G7 summit in Alberta and the impending House adjournment are the Carney government’s last chance to show leadership, before an undeserved summer break for a government that will be overseeing deepening economic decline, rising crime under a refusal to tackle catch-and-release bail, and growing unemployment. Canadians cannot afford another season of unfulfilled promises and unchecked crises. The NCC demands Carney use the G7 platform to secure trade stability, meaningful energy deals with our allies, and table a federal budget to address the cost-of-living crisis made worse by inflationary Liberal spending. Failure to act now will cement an early legacy of inaction and leave Canadians to endure a prolonged period of hardship.

“The Carney government’s honeymoon has been built on hype, not results,” says NCC Director Alexander Brown. “From Gregor Robertson’s hidden millions, to stalled pipelines, to an immigration system in continued disarray, Canadians — and particularly young Canadians — are being let down. This week is Carney’s chance to prove he can deliver beyond the lies that were told to placate a portion of the electorate at the polls. If he fails to act, the economic decline, the crime and chaos, will only worsen, and everyday Canadians will pay the price.

“True Canadian leaders like Alberta Premier Danielle Smith are in attendance at the G7 along with Carney. If actual acts of ‘nation-building,’ and not more net-zero de-growth, do not come naturally to the PM, he should turn to those who have never wavered in their quest to make life more affordable for the hard-working citizens they are privileged to represent, and who know when to get out of the way to allow Canadians to prosper. More of the same internal, ideological sabotage from the Liberals cannot ruin this dire moment for Canada’s rebirth and recovery.”

The NCC calls on all Canadians to hold the Carney government accountable. Join us in demanding transparency, action, and results before the House adjourns and the G7 summit concludes. Together, we can fight for a stronger, more prosperous Canada.

About the National Citizens Coalition: Founded in 1967, the NCC is a non-profit organization dedicated to advocating for individual freedom, lower taxes, less government waste, and a stronger Canada. We hold governments accountable and fight for the interests of everyday Canadians.

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Energy

Could the G7 Summit in Alberta be a historic moment for Canadian energy?

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From Resource Works

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Canada can be the democratic world’s top energy supplier, and the G7 Summit in Alberta is the perfect time to commit to that.

Canada is at the crossroads of opportunity as the leaders of the G7 convene in Kananaskis, Alberta.

An Ipsos poll has named Canada the top preferred oil supplier among G7 countries for the second time since 2023. No less than 68 percent of G7 respondents declared that Canada was among their top three choices to supply oil.

This should be yet another motivator for Canada to solidify itself as a key player in energy security and economic stability among the democratic nations.

The timing and location of this year’s G7 summit shows how important Canada can be to the world. Alberta, Canada’s energy heartland, is the source of nearly all of the country’s oil, and the provincial government wants more of it to reach global markets.

Those geopolitical anxieties caused by Russia’s invasion of Ukraine in 2022 have not disappeared, and Canada’s allies and partners like the European Union (EU), Japan, South Korea, and India are looking for a reliable and responsible partner to supply them with energy, and we are the best and most obvious choice.

Willing partners are easy to find overseas, but the other provinces and the federal government need to become equally enthusiastic first.

There is more to this than mere symbolism. Canada embracing its position as the most desirable supplier of oil makes complete sense.

In 2023, Ipsos found that Canada’s political stability, comprehensive environmental rules, and strong regulatory frameworks are why it ranked first among preferred oil suppliers. Norway is another popular option, but Canada has the advantage of better market access to the United States and the Asia-Pacific, along with established infrastructure and an open government.

It all combines to create a distinct advantage for Canada in the world of trade.

The US has slid as a popular oil supplier, to Canada’s advantage, and we need to capitalize on that more than ever.

As Russia’s bloody, disruptive war with Ukraine continues to drag on, the EU still needs sources of alternative energy to make a clean break with Moscow. Russia had previously served as the bloc’s effective gas station, albeit one armed with nuclear weapons.

G7 member states like Britain and the EU are looking to slap even stricter limits on Russian energy exports that go beyond what is already in place. Whatever Russia has to lose is Canada’s to gain.

Canada began to enlarge its export capacity last year with the completion of the twinning of Trans Mountain pipeline (TMX), enabling Canada to double the amount of oil it can pipe to Pacific markets. Shipping larger amounts of Canadian energy to partners in Japan, India, South Korea, and others has never been easier.

It was a monumental example of how investing in the right sorts of infrastructure can improve economic security, both nationally and internationally. Internally, developing the oil industry is a long term goal of First Nations leaders and communities.

The myth of First Nations opposing the expansion of oil and gas is one that needs to die. The Indian Resource Council, which represents over 130 First Nations, has repeatedly championed the responsible development of natural resources as a means of fostering economic independence and community renewal.

Many First Nations and other Indigenous groups have invested heavily into pipelines, production sites and storage facilities, and want to expand it further. In terms of pure economic value, there is not another industry that has created more wealth in Indigenous communities across Western Canada.

Complacency from the federal government and other authorities at this time could not be timed more poorly as the G7 Summit comes to Alberta. When the gathering ends on June 17, we should hope that it was a turning point where Canada made a direct and clear commitment to modernizing and expanding its oil and gas sector.

Our role in the world can be that of the great democratic alternative to Russia when it comes to supplying energy and other resources. Alberta knows it, as do our allies and Indigenous people across Canada.

Ottawa should listen. It is time to realize our potential to be an even greater energy superpower.

Through that, we can reduce the power of authoritarian, hostile regimes in the world by building a stronger, more unified Canada.

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