NDP prepared to brush off higher costs of Trans Mountain project

Being only pipeline game in town, Notley’s re-election hinges on shovels in the ground

I suppose all the Alberta government can do at this point is shrug. Which is pretty much what it did this week when news came of more potential bad news for the planned expansion of the Trans Mountain pipeline.

The project might end up costing $1.9 billion more and take 12 months longer to complete than planned. Can’t this project catch a break? It’s been plagued by delays, protests and political interference from the British Columbia government.

It was so close to death it had to be saved by the federal government, which agreed to buy the existing Trans Mountain pipeline for $4.5 billion — and then committed to invest another $7.4 billion twinning the pipeline to triple its capacity to ship oilsands bitumen to the West Coast for transport overseas.

And now this. The gloomy forecast was included in documents filed Tuesday with the United States government by the pipeline’s current owner, Texasbased Kinder Morgan, which hopes to have the sale to the Canadian government approved in September.

Kinder Morgan’s documents offered several possible scenarios for the expansion project, including an increase in the cost to $8.4 billion, with a completion date in December 2020, and a cost escalation to $9.3 billion, with a completion date in December 2021.

The Alberta government, ever the champion of Trans Mountain, was quick to point out Kinder Morgan’s scenarios are hypothetical.

“The Kinder Morgan filing is not an updated projection,” said Cheryl Oates, a spokeswoman for Premier Rachel Notley. “It is economic modelling based on one of a number of scenarios.”

But even if the project will eventually cost $9.3 billion, and won’t be done until the end of 2021, the Alberta government doesn’t care. It just wants shovels in the ground before Alberta’s provincial election, which is expected next May.

Notley has already said the Alberta government is willing to invest up to $2 billion as a backstop to ensure the project goes ahead. We won’t know details until after the sale is completed and the federal government has signed construction contracts.

The good news in all of this, I suppose, is published reports say even if construction costs increase, Trans Mountain will still be profitable. When it comes to getting more of Alberta’s bitumen overseas, it’s the only pipeline game in town.

One day the pipeline will be sold back to the private sector.

But it has to be built first. And that, as Notley’s critics point out, seems to be taking forever.

If we see steel pipe being lowered into the ground in time for the next election, Notley can argue her climate leadership plan — the one with the muchmaligned carbon tax — helped her win the social licence needed to get Trans Mountain done.

Here’s how the political math works for Notley: Carbon tax + Trans Mountain pipeline = a chance of surviving the 2019 election.

Carbon tax + no Trans Mountain = no chance of surviving the 2019 election.

Without Trans Mountain, the carbon tax is just a tax — and easily assaulted by critics as a cash grab. The United Conservative Party will happily use it to beat the NDP’s credibility from here to Christmas, and beyond.

It won’t do much good for the government to argue the tax is needed to reduce greenhouse gas emissions and provide funding to help green the economy. The levy isn’t high enough to reduce emissions significantly over the short term and it will take years to determine if the funding helped diversify the economy.

And the NDP can’t simply label all of its critics as climate change deniers. There are indeed those benighted souls who ignore or deny the science of man-made climate change.

But there are the pragmatic souls who accept the science, but worry Alberta’s climate change leadership is taking us too far ahead of the parade compared to other jurisdictions. They’d like to see a reward for the carbon tax.