The Trans Mountain Pipeline Gamble
The Federal Government continues with plans to build the Trans Mountain Pipeline
As most now know it is a pipeline is to pump diluted raw bitumen over crown, private and aboriginal lands to tidewater near Vancouver B.C. While business and Albertans generally support it, First Nations and a public concerned about environmental impacts and climate change oppose it. The federal government insists the pipeline is vital for our economic future.
An expenditure of some $14 billion will be required to build the pipeline and the accompanying facilities. This is additional to $4.5 billion the Federal Government spent purchasing a 45-year-old pipeline from Kinder Morgan, an American energy infrastructure corporation.
This mega project is not without financial risk. To my knowledge, there is no assured overseas market for our dirty oil. There is no agreement stating that the Chinese, the most mentioned customer, will purchase a product that will be costlier than higher grade oil and gas from neighboring countries. And, with whom they have friendlier relations.
China, a signatory to the Paris Climate Change Agreement, plans to dramatically increase its use of wind and solar power replacing the need for fossil fuels. Furthermore, the cost differential between fossil fuels and renewables has narrowed and will, in time, tip in favour of renewables. The Trans Mountain cannot be expected to come on line before 2022 at the best. By this time China will likely be reducing its need for oil.
New technologies will reduce future oil demand. One new technology being developed allows for the transmission of electrical currents over thousands of miles without electricity depletion. This will allow for renewable power generation in deserts providing power for industry and cities thousands of miles apart and foreshadows cities and industrial heartlands no longer requiring fossil or nuclear power generation stations nearby. Without a thorough understanding of the marketability of our dirty oil the federal government is rolling the dice on our future.