[CaptainCrunch]

A look at the over budget and delayed TMX expansion.


https://calgaryherald-com.cdn.amppro...dccbe675a/amp/

ast month, the federal government’s budget watchdog issued a report saying the Trans Mountain Expansion project, a twinning of a pipeline first built in 1953 that brings oil from Edmonton to Burnaby, was no longer commercially viable. The cost has jumped from $7.4 billion in 2017 to $21.4 billion today.
Distroscale

An economic slam dunk of an idea — moving Canada’s enormous oil reserves to energy-hungry Asian markets, instead of accepting lower prices in the shale-flooded American market — TMX is still deemed viable in downtown Calgary. Producers in Alberta have lined up for contracts, and at a $100/barrel world price, the business case remains strong.

But detractors of the project jumped on the news, arguing that TMX is now destined to be a money loser for the country. The irony, of course, is that it is delays sparked by those detractors that largely caused the costs to balloon in the first place.

How did the cost of TMX triple since then? COVID, B.C. floods and wildfires did it no favours. But it was regulatory and permitting delays, environmental concessions, and the cost of capital, interest and labour to address all of those that have added the lion’s share. TMX has become the poster child of Canada’s broken regulatory approval system.

But it is a bird’s nest that best highlights the disdain shown for the project. In April 2021, an Anna’s hummingbird nest was found in a tree that was felled in TMX’s clearing zone. It was reported by members of the Community Nest Finding Network, who had been watching the site. The Anna’s hummingbird conservation status is of “least concern” and its breeding range has actually expanded in recent decades. But Environment and Climate Change Canada decided to shut down construction for months, concerned that other nests could be similarly damaged. It is difficult to gauge the exact cost of this shutdown, but credible assessments have pegged it north of $100 million.