As an Alberta-born-and-raised earth scientist who has made a career studying fossil fuels and energy issues, I am dismayed at the bombardment of ads from the Alberta government on the Trans Mountain pipeline expansion.
One ad tells us:
“Canada’s economy loses out on an estimated $80 million dollars in economic benefits every day that the expansion is delayed. Trans Mountain changes that, providing an $80 million-a-day economic boost to our country, supporting thousands of jobs from coast to coast to coast.”
Every day? In fact, the earliest Trans Mountain could be completed is 2022. Two other pipelines under development, Enbridge’s Line 3 (due in late 2019) and Keystone XL (due in 2021) will provide twice the export capacity of Trans Mountain to higher-priced U.S. markets. Trans Mountain is intended to unlock new Asian markets.
The Trans Mountain delay is costing Canada nothing given that pipeline bottlenecks will be eliminated without it. Yet, a counter on the Alberta government’s Keep Canada Working website shows that (as of Feb. 15) the court-ordered shutdown has cost Canada $13.5 billion.
The differential between Alberta heavy oil (Western Canada Select/WCS) and the North American price (West Texas Intermediate/WTI) is normally about $15 per barrel. This is because WCS is priced at Hardisty and incurs a transportation cost of $7 via pipeline to Cushing, Okla., where WTI is priced. And because WCS is lower grade oil than WTI, it incurs a further quality discount of about $8 per barrel as it is costlier to refine. MORE