PM urged to reject pipeline expansion
No business case for Trans Mountain proposal, former minister says Protesters opposed to the Trans Mountain pipeline expansion rally in Vancouver recently.
VANCOUVER— A former Liberal environment minister is urging Prime Minister Justin Trudeau’s cabinet to reject the Trans Mountain pipeline expansion, arguing there is no economic basis for the project.
David Anderson, who served 10 years in the cabinets of prime ministers Jean Chrétien and Paul Martin, sent letters to six members of Trudeau’s cabinet this week asking them to dismiss the pipeline proposal.
“There is no credible evidence to suggest that Asia is likely to be a reliable or a significant market for Alberta bitumen,” Anderson wrote in the letter dated June 11.
Cabinet is expected to announce its decision on the expansion of the Alberta-to-B.C. pipeline by Tuesday. Given that Trudeau’s government bought the pipeline and expansion project for $4.5 billion, it’s widely anticipated to give it the green light.
Anderson holds a law degree and served eight of his 10 years in cabinet as the senior federal minister for British Columbia. While he was environment minister in 2002, Canada ratified the Kyoto Protocol on climate change. He is now an honorary director of West Coast Environmental Law and has previously spoken out against the Trans Mountain project.
His letter doesn’t focus on the climate and environmental impacts of the expansion. Instead, he took aim at the economic argument for the project, which he described as the “perceived need for a pipeline connection with tidewater in order to sell Alberta bitumen in Asian markets, where, so it is claimed, it would find new purchasers.”
“With respect, you and other government ministers have yet to provide evidence in support of that hope,” he wrote.
Anderson wrote that Asian refineries have better supply options than Alberta. Compared with conventional light and medium crude oil from Nigeria and the Middle East, Alberta bitumen is expensive to produce, hard to handle and provides no security of supply advantages, he said.
Further, he said despite access to tidewater through unused pipeline capacity in the existing system and through American Gulf of Mexico ports, Alberta’s bitumen has not found or developed any significant offshore market in Asia or anywhere else. “Why? Because buyers are few and far between. That remains the situation today, and there is little to suggest it will change in the future. Building a new pipeline will not change the market.”
Canada’s two major competitors are Venezuela and Mexico and they’ve faced the same low demand and low prices that have eroded the value of Alberta bitumen, he added.
Anderson said in an interview that he sent the letter because he is a Liberal and felt the government needed to be reminded that it had not made a business case for the project. He said no one had responded.
“You’d think the people who own the pipeline, the Canadian taxpayers, should be informed of what their asset is likely to bring in,” he said.
Trans Mountain Corp. has said the expansion will inject $7.4 billion into Canada’s economy, boost federal and provincial tax coffers by $46.7 billion and increase revenues for producers by $73.5 billion over 20 years.