Support journalism that lights the way through the climate crisis

Goal: $100k
$20,277

CALGARY — The Canada Energy Regulator has approved Trans Mountain Corp.'s application to modify the pipeline's route, a decision that could spare the government-owned pipeline project from an additional nine-month delay.

The regulator made the ruling Tuesday, just one week after hearing oral arguments from Trans Mountain and a B.C. First Nation that opposes the route change.

It didn't release the reasons for its decision Tuesday, saying those will be publicized in the coming weeks.

By siding with Trans Mountain Corp., the regulator is allowing the pipeline company to alter the route slightly for a 1.3-kilometre stretch of pipe in the Jacko Lake area near Kamloops, B.C., as well as the construction method for that section.

Trans Mountain Corp. had said it ran into engineering difficulties in the area related to the construction of a tunnel, and warned that sticking to the original route could result in up to a nine-month delay in the pipeline's completion, as well as an additional $86 million more in project costs.

Trans Mountain has been hoping to have the pipeline completed by early 2024.

But Trans Mountain's application was opposed by the Stk’emlúpsemc te Secwépemc Nation, whose traditional territory the pipeline crosses and who had only agreed to the originally proposed route.

In their regulatory filing, the First Nation stated the area has "profound spiritual and cultural significance'' to their people, and that they only consented to the pipeline's construction with the understanding that Trans Mountain would minimize surface disturbances by implementing specific trenchless construction methods.

The Stk’emlúpsemc te Secwépemc argued that Trans Mountain never said its originally proposed construction method was impossible, only that it couldn't be done in time to meet a Jan. 1 in-service date for the pipeline.

Trans Mountain Corp. had said if its route deviation request was denied, it could result in a nine-month delay and $86 million more to the pipeline's final price tag.  #TMX

The First Nation didn't respond to a request for comment by publication time.

The Trans Mountain pipeline is Canada's only pipeline system transporting oil from Alberta to the West Coast. Its expansion, which is currently underway, will boost the pipeline's capacity to 890,000 barrels per day (bpd) from 300,000 bpd currently.

The pipeline — which was bought by the federal government for $4.5 billion in 2018 after previous owner Kinder Morgan Canada Inc. threatened to scrap the pipeline's planned expansion project in the face of environmentalist opposition and regulatory hurdles — has already been plagued by construction-related challenges and delays.

Its projected price tag has since spiralled: first to $12.6 billion, then to $21.4 billion and most recently to $30.9 billion (the most recent capital cost estimate, as of March of this year).

Keith Stewart with Greenpeace Canada said it's alarming to see the regulator over-rule the wishes of Indigenous people in order to complete a pipeline on deadline.

"Every Canadian should be outraged that our public regulator is allowing a publicly owned pipeline to break a promise to Indigenous people to protect lands of spiritual and cultural significance," Stewart said.

The federal government has already approved a total of $13 billion in loan guarantees to help Trans Mountain secure the financing to cover the cost overruns.

Trans Mountain Corp. has blamed its budget problems on a variety of factors, including inflation, COVID-19, labour and supply chain challenges, flooding in B.C. and unexpected major archeological discoveries along the route.

Given the Canadian regulatory system has a reputation for being slow and cumbersome, it was surprising to see the Canada Energy Regulator rule so quickly on Trans Mountain's route deviation request, said Richard Masson, executive fellow with the University of Calgary's School of Public Policy.

"It's a challenging decision to have to make when you've got a $30-billion pipeline that needs to be completed," Masson said.

"If there's no feasible way to do that tunnel, then I guess you have to allow for this."

Masson added that if the regulator had denied Trans Mountain's request, it would have been bad news for taxpayers as well as the federal government, which is seeking to divest the pipeline and has already entered into negotiations with several interested Indigenous-led buyers.

It also would have been bad news for Canadian oil companies, who have been eagerly anticipating the pipeline's start date to begin shipping barrels to customers.

"If this can result in the pipeline being completed by year-end and started up in the first quarter, that's good news. The world is still looking for oil, and oil prices are up at US$90 a barrel," Masson said.

This report by The Canadian Press was first published Sept. 25, 2023.

Keep reading

"...already entered into negotiations with several interested Indigenous-led buyers."

I realize this interest from indigenous communities has been around for quite a while, but it's never made much sense to me.

Why would any indigenous community buy into a dying industry (talk about a very expensive, potentially stranded asset) which by its nature, destroys ecosystems? It seems to me that if the pipeline is a financial success (maybe only if the federal gov't discounts the sale price at a loss to taxpayers) then the biosphere will further degrade. Those communities would be in the odd position of choosing financial gain over the health of the planet and the well-being of future generations.

I wonder if anyone has a good analysis of this conundrum?

Union of B.C. Indian Chiefs, Grand Chief Stewart Philip, president, and Kukpi7 Judy Wilson, secretary treasurer, wrote a letter to the First Nations leadership warning of the pitfalls of this. It was published in Burnaby Now on April 26, 2019. The letter warns of the costs, that the touted market in Asia may not exist, that the shippers may not be committed, that the tolls are not calculated to pay off the whole pipeline, that the economics of oil are changing because of climate change, and opposition from First Nations. There is also a clear conflict of interest of the federal government being both owner and representative of the Crown. Anyone interested should read the whole letter.

That the hearings ended last Thursday and the decision was issued yesterday means that there was only one (or two?) working day to make the decision. There is an implication that the decision was made in effect in advance. The choice was between Trans Mountain’s desire to get the pipeline finished as soon as possible, and the desecration of First Nations sacred land and the legal application of the UNDRIP.

The decision is another example of colonization at work. It should be appealed.

I'm not privy to all the pertinent information related to this issue, but one question (of many) that pops into my mind is -- where were the geological engineers, or other pertinent responsible professionals, during the original feasibility study for the pipeline routing? This is not even mentioned. How did/could they miss this obvious shortcoming in the proposed study? Imagine, oh, say, having to reroute, with awkward unplanned curvatures, subway tunnels, water diversion tunnels, highway tunnels, even the high-speed Chunnel rail line, because "we ran into unforeseen problems that would cost more money and time so we have a new plan". Of course, if no one is 'responsible', it's not for me to cynically suggest that maybe this was not an 'accidental discovery', which would require changing original plans and promises. Just wondering.

Here is one geological engineering report, on HDD
https://docs2.cer-rec.gc.ca/ll-eng/llisapi.dll/fetch/2000/90464/90552/54...

Also
https://docs2.cer-rec.gc.ca/ll-eng/llisapi.dll/fetch/2000/90464/90552/54...

I think there are more. One will usually find caveats at the end of geotechnical reports.

As I understand from the hearing transcripts that Trans Mountain understood that microtunnelling might not succeed, and persuaded the First Nation to allow a trench if that happened. Is that true? We will never know because if it is it is in the Mutual Benefits Agreement, which is not publicly available, though the Canada Energy Regulator has it. As far as I am concerned, all the MBAs should be public.