Western Canada’s Trans Mountain Expansion Project, better known as TMX, has seen more than its share of setbacks over the past 10 years: environmental protests, legal challenges, funding issues, a change in ownership and even a major flood event in 2021. But it looks like the 590 Mb/d expansion of the now 300 Mb/d Trans Mountain Pipeline system will definitely become a reality. allow Alberta crude oil to be exported on a large scale to Asian markets. There is a catch, though. Long project delays and other problems resulted in massive cost overruns that are now being reflected in 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 send heavy crude oil in tidewater to Trans Mountain as it would through Enbridge’s competing system to the US Gulf Coast for “re-export,” even though the latter is 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, most importantly, 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 shipping capacity of the existing TMP system, the expansion appears closer to final completion with the recent unveiling of preliminary tolls (called tariffs in the US) that would apply to shippers of the combined TMP/TMX system once the expansion is operational.
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. Running 1,150 kilometers (715 miles) through rugged, mountainous terrain in British Columbia (BC), the 70-year-old Trans Mountain Pipeline (solid green line in Figure 1) runs from its receiving point in Edmonton, AB, (with additional small receipts entering through Kamloops, BC) before reaching the 55-Burblue-M-Refine Park (Burblue-M). naby, BC, or the Westridge (yellow star) export docks about 2 miles (3 km) north of the refinery. TMP also transports crude oil to four refineries north of Seattle, Washington state (red, green, orange and purple triangles) via the Sumas export point, via the 69-mile (111 km) Trans Mountain Puget Sound pipeline system (hot pink short line).
