‘Cancel this project’: Price tag of Trans Mountain expansion nearly doubles

Monday, February 21, 2022

Nation of Change

One campaigner called on Canada's government to instead "put all of our energy and political will into a just transition that leaves fossil fuels in the ground and supports people, communities, and workers."

Climate activists on Friday renewed calls for canceling the expansion of the Trans Mountain oil pipeline after the Canadian government responded to the project’s soaring cost by pledging not to put any more public money into it.

“Trans Mountain is an absolute dumpster fire and it’s outrageous that it’s been allowed to carry on on the public dime all this time.”

“Trans Mountain never made any sense to build during a climate crisis,” Emma Jackson, senior Canada organizing specialist with 350.org, said of the federally owned infrastructure. “Now, after a year where the pipeline was delayed by climate-fueled fires, heat, floods, and landslides, the government is pulling funding while the price tag has skyrocketed to $21.4 billion.”

“This is the moment to cancel this project outright,” she declared, “and put all of our energy and political will into a just transition that leaves fossil fuels in the ground and supports people, communities, and workers.”

Climate campaigner Peter McCartney concurred in a statement from the Wilderness Committee.

“Everyone warned the federal government not to buy this cursed pipeline and anybody who has been tracking construction knows costs have spiraled out of control,” McCartney said. “It’s long past time for the federal government to put the shovels down, look at the evidence, and walk away from the project.”

Trans Mountain Corporation (TMC) announced Friday that the price tag of the pipeline expansion has nearly doubled from an earlier estimate of $12.6 billion.

As Canada’s Global News reports:

The company blamed the cost increases on the Covid-19 pandemic and the effects of the November 2021 flooding in British Columbia, as well as project enhancements, route changes to avoid culturally and environmentally sensitive areas, and scheduling pressures related to permitting processes and construction challenges in difficult terrain.

The company has also pushed back the projected completion date of the project to the third quarter of 2023. The pipeline expansion was originally expected to be complete sometime this year.

TMC is a subsidiary of a crown corporation—a federally owned organization structured like a private company—that controversially purchased the pipeline from Texas-based Kinder Morgan in 2018, earning Prime Minister Justin Trudeau widespread condemnation.

Shortly after the new cost estimate was revealed Friday, Deputy Prime Minister Chrystia Freeland said in a statement that the government “will spend no additional public money on the project” and TMC “will instead secure the funding necessary to complete the project with third-party financing, either in the public debt markets or with financial institutions.”

“The government has engaged both BMO Capital Markets and TD Securities to provide advice on financial aspects of the project,” she continued, claiming the analyses show public financing “is a feasible option” and the expansion “remains commercially viable.”

Freeland added the Canadian government “does not intend to be the long-term owner” and “intends to launch a divestment process after the expansion project is further de-risked and after economic participation with Indigenous groups has progressed.”

McCartney asked, “Who in their right minds would lend money to this company when construction costs have exploded to four times the original estimate of $5.4 billion to $21.4 billion today?”

“Trans Mountain is an absolute dumpster fire,” he said, “and it’s outrageous that it’s been allowed to carry on on the public dime all this time.”

“Investors have gotten far more climate savvy in recent years. I cannot see them lining up behind a project that’s so obviously out of line with where the world is going,” he added. “Could this finally be the end of the Trans Mountain pipeline?”

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