What is the Trans Mountain Expansion Project?
Trans Mountain is proposing an expansion of its current 1,150-kilometre pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, BC. If approved, the proposed expansion would create a twinned pipeline that would increase the nominal capacity of the system from 300,000 barrels per day to 890,000 barrels per day.
With a projected capital cost of $5.4 billion, the expansion would add approximately 994 km of new pipeline and reactivate 193 km of existing pipeline. To support the expanded pipeline, new facilities would include 12 new pump stations and 20 new tanks added to existing storage terminals in Burnaby (14), Sumas (1) and Edmonton (5).
The Westridge Marine Terminal in Burnaby would be expanded with three new berths, each capable of loading Aframax-size tankers.
Why is it necessary?
As the world’s third-largest oil producer, Canada benefits greatly from the export of national resources. In recent years, the price of Canadian oil has lagged considerably behind global prices. Due in part to the limitations of our current pipeline capacity, we are confined to exporting Canadian oil to the United States where it brings a lower price.
The $5.4 billion pipeline expansion Project would increase the value of Canadian oil by unlocking access to world markets where higher prices are paid for a barrel of oil, resulting in greater tax revenue for Canada.
The lack of market access has cost Canada as much as $50 million a day, according to the Canadian Chamber of Commerce. The expansion Project would also further secure the supply of oil products to the Lower Mainland for use by BC’s residents and businesses.
Where will the Expansion Project go?
Routing of the proposed expansion will remain along the existing Trans Mountain Pipeline right-of-way where practical – 73 per cent of the proposed expanded pipeline would follow the existing right-of way and 17 per cent would follow other existing utility corridors or infrastructure. We are working with municipalities and utility companies to route the pipeline on previously-developed land and in transportation corridors, to avoid construction in new areas, where possible.
In some areas where new developments such as homes and businesses have built up around the pipeline right-of-way since 1953, the new pipeline will follow a new route to minimize disturbance and ensure the safety of the community. This is the case for about 10% of the route. Trans Mountain is continuing its work to optimize the route and minimize impacts to people and the environment through a combination of technical and environmental studies, public consultation and on-the-ground fieldwork.
What are the benefits?
Economic opportunities will flow to local communities if the proposed Trans Mountain Expansion Project is approved. Communities, businesses and individuals along the pipeline route would benefit through jobs, supplier opportunities and increased taxes and local revenues.
The pipeline development (construction) phase and the first 20 years of operations are expected to generate 108,300 direct, indirect and induced employment person years of employment. Approximately 79,000 of these jobs represent direct jobs for our proposed pipeline expansion, long-term operations jobs with Kinder Morgan Canada and many high-paying indirect jobs supporting construction and operation of our expanded line.
The proposed expansion Project would generate direct impacts from spending on materials and services associated with building the pipeline, along with additional economic benefit as a result of worker spending. Construction workforce spending in pipeline construction communities would be approximately $480 million.
Direct capital spending for the construction phase of the Project includes $3.8 billion to British Columbia and $1.6 billion to Alberta. At the peak of construction, 4,500 people would be working on the pipeline expansion.
The combined minimum fiscal impact for construction and the first 20 years of expanded operations would be $18.5 billion including federal, provincial and municipal tax payments that can be used for public services such as health care and education.
Municipalities would receive property tax increases of approximately $23.2 million annually in BC. Construction workers will spend $479.6 million ($381.7 million in BC and $97.9 million in Alberta) on accommodation, meals and personal items in pipeline communities during construction.
Who are the parties involved?
Given its large size and scope, the proposed Trans Mountain Expansion Project involves the input, guidance and approval of numerous parties. The Trans Mountain Pipeline is operated by Kinder Morgan Canada (KMC) and is owned by Kinder Morgan Energy Partners, LP.
In order to undertake the process to expand the system, Trans Mountain applied in December 2013 to the National Energy Board (NEB) for approval. The expansion proposal was developed in response to requests for increased pipeline capacity from Western Canadian oil producers and from West Coast refiners.
In support of the proposal, Trans Mountain has embarked on extensive programs to engage Aboriginal communities, and to consult with landowners, government agencies (including regulators and municipalities), stakeholders and the general public.
The NEB will undertake a detailed review of our Application and hold Oral Hearings to determine if it is in the public interest to recommend a Certificate of Public Convenience and Necessity for construction and operation of the proposed pipeline expansion.