BAD IDEA! Holding Off on Launching a New Oil Pipeline to the West Coast Until the Trans Mountain Reaches Full Capacity is a Bad Idea – Jim Warren

Holding off on launching a new oil pipeline to the coast until the Trans Mountain reaches full capacity is a bad idea.

By Jim Warren.

Unlike Trans Mountain Pipeline (TMX) CEO, Mark Maki, virtually everyone else involved in Western Canada’s petroleum and natural gas industries believes it is indeed possible to walk and chew gum at the same time.

On August 26, Maki told reporters that new oil pipelines to the West coast should be put on the back burner until at least 2030 after the pipeline he operates reaches its full capacity.

In response to Maki, Pierre Poilievre, among others, explained that it is possible to do two things at the same time—work to optimize the capacity of the TMX while at the same time putting the wheels in motion to get a new export oil pipeline to tidewater approved and built.

Alberta Energy Minister, Brian Jean, agrees that optimizing the TMX and building a new million-barrel-per-day (bpd) pipeline to the Northwest coast of BC should happen concurrently.

Jean told CTV that even with both the Trans Mountain and a new million bpd pipeline fully operating “we won’t meet Asia’s projected demand for Alberta’s heavy oil. As a government, we fully support every effort to increase TMX’s egress capacity to avoid egress bottlenecks as we take the time to approve and build new pipelines.”

For Premier Danielle Smith, getting a revived and expanded version of the original Northern Gateway project with a tidewater terminal at Prince Rupert has been a priority for her province that predates the passage of Bill C-5, The Building Canada Act.

TMX CEO Maki doesn’t seem to be aware of what the government he works for has been up to. In reaction to Canada’s tariff battle with Trump, our Liberal government has claimed it now supports fast-tracking projects like pipelines to protect our economic sovereignty and expand our export markets beyond the US. Mark Carney has called the tariff fight one of the biggest crises Canada has had to face. Given the urgency attached to increasing Canada’s economic resilience slow walking a Northern Gateway 2.0 makes no sense.

The new Building Canada Act (Bill C-5), under which the application for a new pipeline to tidewater will most likely be made, is only two months old and its supposedly “fast-tracked”  approval process can take up to two full years. Added to this is the time it will take proponents of any new pipeline to the coast to assemble the financing, route assessments, engineering, surveys and other things required for their application. It is not difficult to imagine that obtaining approval under the new rules could take three or more years.

Under that scenario the new pipeline project wouldn’t even get on the launch pad until late 2028. Does Maki assume the sky will fall if the project got underway a little over a year before his rather self-serving “do me first and hold off the competition” deadline.

Adding insult to injury, BC’s NDP premier, David Eby, has apparently calculated that Maki’s efforts to postpone consideration of a new pipeline have let him off the hook. What a relief. He won’t have to flip flop between saying he might be willing to accept a new pipeline to his I do not support any oil pipelines position for five more years. All Eby has to say now is that Canada should maximize the use of the Trans Mountain before pursuing a new pipeline through BC.

Unfortunately, every pipeline detractor from Bloc leader, Yves-Francois Blanchet, to David Suzuki can now jump on the Mark Maki bandwagon and tell Canadians that no new oil pipelines are necessary. If Mark Carney and his squad of virtuous Liberals are looking for a way to weasel out of their already weak statements in support of a pipeline from Alberta to the West coast, Maki has given them cover to at least postpone their approval for five years.

It is interesting to note that a few months back the idea that no new oil pipelines are needed was floated by the green Jesus himself—Steven Guilbeault.  Despite his demotion to minister of identity and culture, Guilbeault clearly remains a menace to the interests of western energy producers. Removing him from cabinet would be a welcome gesture in support of improving relations between Ottawa and alienated westerners.

In view of what Canadians have learned in recent months about the dangers of being overly reliant on a single customer for our exports, access to tidewater for our oil exports is obviously critical to our economic success and national sovereignty. And there are real risks associated with having a single infrastructure system supporting a key export–such as a pipeline and its export terminal. What happens if major problems arise causing the lengthy shutdown of operations on the Trans Mountain system?

In October of 1979, a Japanese freighter crashed into Vancouver’s Second Narrows rail bridge, knocking a complete section of the bridge into the Burrard Inlet. Prairie farmers initially feared the worst—repairs would take months and their ability to ship grain out of the big Vancouver terminals would be compromised. As it turned out the bridge didn’t reopen until March 1980.

Among the factors that helped prevent the sort of marketing disaster that would tank the incomes of over 200,000 prairie farmers was that we didn’t have all our eggs in a single basket. The Port of Prince Rupert on BC’s Northwest coast and the Lakehead terminals in Thunder Bay, along with rail shipments into the US helped prevented a total disaster.

The analogy is obvious, relying entirely on the Trans Mountain for our non-US exports when we can build alternatives is a risk we don’t need to take.

No less bizarre is Mark Maki’s assumption that a new piece of infrastructure can’t be built until the existing one is fully utilized. Where in the world of infrastructure planning is that maxim written in stone? What could be wrong with that line of thinking?

Let’s take for example the drinking water system for an urban municipality. Assume city managers know that the city’s population is predicted to rise by 2% per year for the next 10 years. The managers realize with that rate of growth the capacity of the city’s wells, reservoirs and water treatment plant will be exceeded in five years. The managers estimate that construction of the expanded infrastructure required to meet increased demand will take up to three years.

Here is a question reporters might ask Mr. Maki. Should a city in that situation take his advice and wait the five years until full capacity is achieved and the city starts running short of water before launching construction on its system expansion projects? What does he think happens in the real world of project planning?

Once again the Liberals have left us with more questions than answers. Were Maki’s comments on August 26, simply the puffery of a CEO looking to advance the interests of his company? Or are they thoroughly vetted talking points coming out of the prime minister’s office (PMO)?

If Maki came up with the inane five year postponement statement all on his own, he should give his head a shake, put on his big boy pants and walk it back. If he was running interference on behalf of a government backed-effort to kill new oil pipelines we have a bigger problem.

The most significant barrier to getting a new pipeline to the coast built is the federal government’s failure to deal with the threat to development posed by Bills C-69 and C-48. Blaming the postponement of such a project on the need to first optimize use of the TMX is deceitful.

 

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