Barrels of oil

The future of the Trans Mountain pipeline expansion project is once again being called into question — this time by a new report that argues the mix of competing pipelines, changes in energy demand and shifts in international prices could wreak havoc on the project’s business case.

One of the main arguments for the Trans Mountain expansion has always been the need to get more western oil to tidewater so it can find new markets outside of the U.S. Before the pandemic, the Alberta government said that — without the Trans Mountain expansion — Canada would continue to sell its oil abroad at a steep discount, costing the Canadian economy $16 billion a year.

The federal government says at least 500,000 barrels a day will be available for export to global markets once the expansion is complete.

But the new report casts doubt on that argument. Canadian producers could be worse off, it says, because Asian markets have been paying less for heavy/sour oil, which is comparable to Western Canadian crude. Depending on market conditions and higher transportation costs, the report notes, producers could lose $4 to $6 per barrel.

Source: Trans Mountain expansion may not be economically viable, says think tank report | CBC News