Construction costs of Canada pipeline to Pacific soar

2 min

Ottawa (AFP)

The cost of constructing a government-owned pipeline to the Pacific coast that would open new overseas markets for Canadian oil has jumped 70 percent, the management company announced Friday.

Design changes, additional regulatory processes and delays caused by environmental activists' protests and legal challenges drove the pipeline costs to $9.5 billion (Can$12.6 billion), up from a $5.6 billion estimate three years ago, said Ian Anderson, the chief executive of government subsidiary Trans Mountain.

At a press conference in Ottawa, Finance Minister Bill Morneau said the Trans Mountain pipeline project, which was nationalized in 2018 to prevent its collapse, was still "commercially viable."

"Getting our resources to global markets in a way that is efficient and safe is in Canada's best interest," he added.

But Greenpeace's Patrick Bonin responded that "this explosion in the costs of Trans Mountain's expansion is enough to scare environmentalists as much as fiscal conservatives."

He said the money would be better invested in public transit and renewable energy projects.

The government in 2016 approved the project connecting the Alberta oil sands to a Pacific coast shipping terminal, and two years later bought the troubled project for $3.3 billion from Kinder Morgan.

On Tuesday, a federal court denied the latest bid by indigenous tribes to block construction, dismissing their claim that they had not been adequately consulted on the project.

Alberta Premier Jason Kenney called the ruling the "last remaining legal obstacle" to its construction.

But the tribes vowed to bring their fight to the Supreme Court.

The Trans Mountain project would expand an existing 715-mile (1,150 kilometer) conduit to move 890,000 barrels of oil a day across the Rocky Mountains to the Pacific coast, replacing a smaller, crumbling conduit built in 1953.

Morneau noted that construction is now underway and would create up to 5,500 jobs. More than 2,900 have already been hired.