Canadian public money props up pipelines

Gary Park

for Petroleum News

Money from the public purse is warping Canada’s financial marketplace in favor of fossil fuel pipelines, claims a new research study.

The International Institute for Sustainable Development estimates C$23 billion has been spent by provincial and federal governments combined with the value of loan guarantees that governments and other financial instruments have used to help build pipelines.

Report author Vanessa Corkal said the bulk of the money exists outside the form of direct subsidies.

The institute spent two years probing public documents on government support for three pipelines.

That included C$11.3 billion in federal loans to finance the government’s purchase of the Trans Mountain line and the C$6 billion the Alberta government offered in loan guarantees for TC Energy’s Keystone XL, although the money was never tapped when President Joe Biden scuttled the project.

The researchers also identified a C$500 million loan for the construction of TC Energy’s Coastal GasLink, the pipeline designed to carry feedstock gas to the LNG Canada export venture.

As well, the institute said governments play a role in other ways to limit the risks to industry.

For example, Trans Mountain has spent C$34 million covering its operating losses and pension costs.

The federal government has also promised to stand behind a C$2 billion “emergency fund” promised by Alberta in the event that the project encounters “unforeseen circumstances.”

- GARY PARK