Trans Mountain: A year after approval

One year after the federal government approved the Trans Mountain Expansion Project, we remain at a pivotal crossroads.

On November 29, 2016, the federal government gave its approval of the Trans Mountain Expansion Project, deeming it to be in our “national interest.” This was a positive step for the majority of Canadians who support Canada’s responsible production of oil and natural gas resources, and the jobs and economic prosperity our industry creates.

One year later, we remain at a pivotal crossroads. Moving forward and ensuring Trans Mountain is built is more critical than ever.

Currently, the U.S. is Canada’s largest oil and natural gas customer. In 2016, about 99 per cent of our energy exports was shipped to the United States. Less than one per cent went overseas. However, in recent years, U.S. dependence on Canadian exports has waned with the rise of shale oil and natural gas production, prompting producers to sell our natural resources at a discount.

Further, the U.S. is seeking changes to the North American Free Trade Agreement (NAFTA) that would disrupt trade for all major Canadian industries resulting in high tariffs and trade barriers that could affect long-term investment, Canada’s prosperity, and put jobs at risk.

Canada needs to seek ways to diversify its customer base and target new, emerging Asian markets such as China and India – both expected to drive global energy growth by 2040.

If Canada wants to remain competitive globally, it is imperative our industry and governments work together to ensure our energy regulations both protect the environment and attract long-term investment.

One of the best ways we can achieve this is with Kinder Morgan’s Trans Mountain expansion pipeline (TMX). The current Trans Mountain pipeline – in service for more than 60 years – already ships 300,000 barrels per day (bpd) to marine ports on B.C.’s West Coast. TMX would nearly triple the pipeline’s capacity to 890,000 bpd.

In the 2017 Crude Oil Forecast, Markets and Transportation report, the Canadian Association of Petroleum Producers predicts Canadian oil supply will increase to 5.4 million bpd by 2030 from 3.9 million bpd in 2016. Canada’s current pipeline capacity is four million bpd.

The $7.4-billion TMX pipeline already has the support of the National Energy Board, the Canadian Environmental Assessment Agency, and was federally approved by Prime Minister Justin Trudeau in 2016. It also garnered approval from B.C.’s former provincial government after meeting five, strict conditions aimed at protecting the environment and benefitting British Columbians.

In addition to a lengthy and rigorous regulatory review, Kinder Morgan held consultations with Indigenous leaders and communities along the pipeline route, conducting dozens of town hall meetings, open houses, and workshops.

Despite regulatory approval, TMX continues to face opposition in the form of court challenges launched by environmental non-governmental organizations (ENGOs), municipalities, and the current B.C. government.

With so many uncertainties facing Canada’s major industries, it’s time the federal government follow through with its commitment to see TMX built.

In the past year, we’ve seen nearly $24 billion in other nation-building pipeline projects fall to the wayside as a result of increased government uncertainty and oversight, such as Enbridge’s $7.9-billion Northern Gateway Pipeline and, most recently, TransCanada’s $15.7-billion Energy East Pipeline and Eastern Mainline Project.

We also lost $36 billion in investment when PETRONAS cancelled its much-anticipated Pacific Northwest LNG project near Prince Rupert, B.C.

Although the need for even more pipeline capacity remains prevalent to ensuring our energy future, TMX signals to the rest of the world that Canada is open for business – meanwhile reducing our dependency on the United States.

Canada’s track record as a safe, reliable, and secure energy provider has already been internationally recognized. In the Ipsos survey, Global Energy Pulse, Canada ranked No. 1 as the energy exporter of choice among respondents from 32 countries around the world.

Collectively, we are the architects of Canada’s future – a future that sees our country as a leader in responsible energy development, environmental innovation and economic sustainability. But only if we move forward and complete key nation-building projects like TMX.©