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Once more for TMX Canadian government announced second approval of TMX project, with Trudeau holding out hope of initial deliveries in 2022 Gary Park for Petroleum News
The Canadian government has reapproved expansion of the Trans Mountain pipeline from Alberta’s oil sands to a shipping terminal in Vancouver.
Reaction to the announcement on June 18 by Prime Minister Justin Trudeau from Canada’s oil industry and the Alberta government could have been summed up in two words - “so what?”
This was, after all, the second go-ahead from the federal cabinet after the project passed three rounds of regulatory hearings.
Each time the plan to triple capacity on the system to 890,000 barrels per day has been tripped up, either by a change of government or court verdicts.
Who is to say that more of the same isn’t in store this time?
Within minutes of Trudeau’s news conference, the old foes had swung back into action.
The British Columbia government, the cities of Vancouver, Burnaby and other B.C. municipalities, the Green Party of Canada, endless environmental organizations and several First Nations were pledging to take their cases to court and some extremists were threatening civil disobedience to block pipeline construction.
Kenney stance muted Little wonder that Alberta Premier Jason Kenney was among those taking a muted stance.
“This isn’t a victory to celebrate. It is just another step in a process that has, frankly taken too long,” he told reporters.
“We’ll measure success not by today’s decision, but by the beginning of actual construction and, more importantly, by completion of the pipeline.”
Calgary Mayor Naheed Nenshi echoed Kenney’s doubts, noting that Alberta needs “more than one level of market access” for its crude bitumen, urging Trudeau to set aside Bill C-69, which is seen as adding more layers to regulatory approvals for major resource projects, and Bill C-48, which will ban oil tankers from operating off the northern B.C. coast.
For the Trans Mountain Expansion, TMX, there is a degree of comfort in knowing that the Canadian government is owner of the existing 300,000 bpd Trans Mountain system, acquired 10 months ago by the Trudeau administration for C$4.5 billion, and the planned 590,000 bpd addition, which carries a C$9.3 billion spending estimate (made two years ago).
At the time his government nationalized Trans Mountain, Trudeau boldly declared that TMX “will be built.”
Along with the reapproval, he again went out on a limb, predicting work will resume this summer, targeting first shipments in 2022, a promise that is backed by evidence.
Pipe sections stockpiled The government-owned Trans Mountain Corp., created to operate the 65-year-old pipeline and lead the expansion work, has already moved hundreds of pipeline sections by rail to growing stockpiles at work sites along the pipeline route.
Kenney turned up the heat, telling Trudeau that “approval is not construction. So let’s get it built.”
In a bid to win over unimpressed environmentalists, Trudeau said all profits from TMX - which he estimated at C$500 million a year - will be spent on clean energy, which some observers noted means the federal government will use fossil fuel revenues to bring about the industry’s demise.
Trudeau also insisted that getting Alberta crude bitumen to the Vancouver tanker port will allow Canada to gain access to lucrative markets in Asia and end its days as “prisoners to the American market.”
B.C. focus on regulations British Columbia Premier John Horgan said his government will continue its attempt to get the Supreme Court of Canada to review his proposed legislation to restrict the flow of bitumen into B.C. on environmental grounds, though he conceded the decision is “within federal authority.”
He said B.C. will now turn its attention to ensuring regulations are in place to protect the Pacific Coast from a tanker spill.
B.C. Environment Minister George Heyman said there are gaps in the C$1.5 billion federal marine response plan, mainly involving spill preparedness and response capacity for local governments and First Nations.
However, Richard Johnston, Canada Research Chair at the University of B.C., said Horgan is now “into a kind of symbolic phase. What else can he do? It’s clear he can’t engage in permitting actions whose obvious attempt is to destroy the pipelines. The courts have made that clear.”
In the meantime, recent polls show a steady shift of B.C. public opinion in favor of TMX, with an online poll by Ipsos finding 60% backing for the pipeline, with 29% opposed and 11% undecided, compared with 41% support in 2016, 34% opposed and 25% undecided. Other polling by Angus Reid and Insights West point to similar trends.
TMC and Alberta oil producers can now turn their attention to seeking the necessary permits to build the pipeline and expanded tanker terminal and what some view as an even greater challenge - ensuring that Asian buyers of the unrefined bitumen are still as interested as they were when the application was filed with regulators six years ago.
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