Western Canada’s Trans Mountain Expansion Project, better-known as TMX, has experienced more than its share of setbacks over the past 10 years: environmental protests, legal challenges, financing issues, an ownership change, and even a serious flooding event in 2021. But it seems the 590-Mb/d expansion of the now-300-Mb/d Trans Mountain Pipeline (TMP) system will finally become a reality by early 2024, enabling large-scale exports of Alberta-sourced crude oil to Asian markets. There’s a catch, though. The project’s long delays and other issues resulted in massive cost overruns that are now being reflected in the preliminary tolls for the soon-to-be-combined Trans Mountain system. The proposed toll increase is so large that it will cost a similar amount to ship heavy crude oil to tidewater on Trans Mountain as it would on the competing Enbridge system to the U.S. Gulf Coast for “re-export,” despite the latter being three times the distance. In today’s blog, we discuss the history of the Trans Mountain expansion, its cost overruns and the calculations that went into the proposed tolls — the kicker being that those tolls could end up being even higher.
It would be safe to say that no other crude oil pipeline project in Canadian history has seen as much scrutiny, analysis, legal and environmental challenges — and immense cost overruns — as TMX. Intended to nearly triple the crude oil shipping capacity of the existing TMP system, the expansion appears to be inching closer to final completion with the recent submission of preliminary tolls (referred to as tariffs in the U.S.) that would be applied to shippers on the combined TMP/TMX system once the expansion is in operation.
To give some context to the preliminary tolls, we need to take a brief tour of the system, as well as the tortured history of the TMX expansion saga. Spanning 715 miles (1,150 kilometers) across rugged, mountainous terrain in British Columbia (BC), the 70-year-old Trans Mountain Pipeline (solid green line in Figure 1) runs from its receipt point in Edmonton, AB, (with additional small receipts entering via Kamloops, BC) before reaching the 55-Mb/d Parkland Corp.-owned Burnaby refinery (blue triangle) in Burnaby, BC, or the export docks at Westridge (yellow star) about 2 miles (3 km) north of the refinery. TMP also transports crude oil to four refineries north of Seattle in Washington state (red, green, orange and purple triangles), through the Sumas export point, via the 69-mile (111-km) Trans Mountain Puget Sound Pipeline System (short hot-pink line).
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