Conservatives accuse Guilbeault of delaying TMX, making it more expensive for taxpayers

During the Standing Committee on Environment and Sustainable Development, the Conservative Opposition took Ottawa to task on their questionable support for the Trans Mountain pipeline expansion and its massive $22 billion in cost overrun.

Conservatives accuse Guilbeault of delaying TMX, making it more expensive for taxpayers
Facebook/ Steven Guilbeault
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The 590,000 barrel-per-day pipeline expansion will nearly triple the flow of barrels and open access to Asian markets. However, regulatory delays and hefty budget overruns have beset the project, on top of environmental opposition.

"[The Liberals] purchased this project for $7.5 billion in 2018 - you're now $22 billion over budget in building [the Trans Mountain pipeline expansion]. This is a ridiculous execution," said Natural Resources Critic Greg McLean, adding, "something has not gone right.

McLean asked federal Environment Minister Steven Guilbeault what factors led to the quadrupling of the project's costs.

Guilbeault deflected and said to request those details specifically from the Ministry of Finance. "I have, but they have yet to respond," replied McLean.

According to Trans Mountain Corp, the cost of the taxpayer-owned Trans Mountain pipeline expansion jumped 44% from last year's estimate ($22.35 billion) to a whopping $30.9 billion.

The Crown corporation said it is trying to secure external financing to fund the remaining cost of the project, which they hope will start shipping oil in the first quarter of 2024.

In February 2022, Deputy Prime Minister Chrystia Freeland said TMX would need third-party funding to complete the project through banks or public debt markets. She reiterated that the federal government plans to sell the pipeline once it is complete.

"As we committed to Canadians last year, no additional public money will be invested in this project as construction is completed," said Freeland. 

"The federal government does not intend to be the long-term owner of the project, and we will launch a divestment process in due course."

Ottawa bought the pipeline from Kinder Morgan Inc. in 2018 for $7.5 billion to ensure the expansion got built, drawing sharp criticism from environmental groups.

In February 2022, Ottawa said it could no longer subsidize TMX. Its new price tag skyrocketed to $21.4 billion, up from $12.6 billion in 2020 and $7.5 billion in 2018. 

"To add delays and confusion, your department promulgated new regulations last year in June on migratory birds that delayed construction by potentially three years — new regulation amid construction near Bridal Falls," said McLean.

"Would you say you are complicit in putting hurdles in the way to stop this pipeline and make it more expensive for Canadian taxpayers?" McLean asked Guilbeault. Trudeau's environment minister said he must review the "premise of the question" before answering.

"We are responsible for protecting species, and we take that very seriously. The new regulations put out were approved by many," responded Guilbeault.

McLean challenged him and said many Canadians would argue that the Pileated Woodpecker — the only species added in the roaming regulation — is not endangered. 

Then he requested a list of the organizations which the Environment Ministry funds that he claimed delayed the TMX project.

The Natural Resources Critic then pivoted to his next question.

"Before being elected in 2019, you said this pipeline gets built… over your dead body. Now you're in Cabinet, and… it seems you're in conflict with the finance minister on building this pipeline. It would benefit Canada over $20 billion annually, and yet it's running into hurdles," said McLean.

"When we have to deliver oil to Europe, the government's response is we can't help you. Can you see now the consequences of not getting our resources to market?"

Guilbeault responded that he doesn't recall reading that TMX would provide oil to Europe.

"Seaborne oil is seaborne oil, minister. Once on the open waters, it goes where the market dictates it goes," said McLean, adding, "we're part of the energy insecurity."

"We have helped Russia deliver around the world. This is a problem we contributed to because of a lack of foresight and ability to develop Canadian resources."

A study by found that Canada's energy sector could offset Russian energy sales if the necessary infrastructure were developed and built to transport these resources to global markets.

Over the next seven to 10 years, Canada could offset upwards of 59% of Russia's annual natural gas exports and 46% of its crude oil exports, amounting to 7.72 billion cubic feet per day (BCF/D) 1.85 million barrels per day (BPD), respectively.

The poll of 1,535 Canadians found 72% of respondents either "somewhat" or "strongly" supported "developing and exporting more oil and natural gas resources so that the world can reduce how much it purchases from Russia."

After Russia invaded Ukraine in February 2022, many observers noted that the Kremlin's natural gas and oil exports funded the tanks and rockets, inflicting death, pain and suffering on the Ukrainian people.

According to the Paris-based International Energy Agency (IEA), oil and gas revenues comprised approximately 45% of Russia's federal budget in 2021. 

The IEA's World Energy Outlook 2022 report projects that the petro state's share of internationally traded gas will fall from 30% to 10–15% by 2030. Russia's oil exports are projected to fall by 25% over the same period.

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