"As much as we need to approve the Keystone pipeline, we need to think far broader than that."
– Ted Cruz
Let’s face it – the TransMountain pipeline is just not going to see the light of day. Kinder Morgan has set a deadline of the end of this month to get assurance that it will go ahead but with the B.C. government’s commitment to do everything within its power to stop it; there is no way that any assurance will be forthcoming in the immediate future. Court challenges are pending and we all know how slow our court system is so we cannot expect any decisions in the next few weeks. And once one decision comes down there is always the appeal process and if that fails they can just dig up another issue for the courts to resolve.
Kinder Morgan will be defeated not by their own actions but ‘death by delay’. Look at Keystone XL – that has been in the mill for 10 years and there still is no decision. I’m sure if TransCanada had known it would take so long, they would have cancelled the project years ago, but now with all they have invested in the process, they will wait it out and hopefully the last few hurdles will be cleared. Kinder Morgan however, can see the writing on the wall and they will walk.
So, what is the solution? As Ted Cruz said, “we need to think far broader . . . “ It is obvious that the opposition is not against pipelines per se, but rather opposition to the transport of bitumen diluted with dilbit. Therein lies the solution – we must upgrade our bitumen here in Alberta. The planned expansion of the NorthWest Upgrader has been put on hold to determine if it can really do what it was proposed to do even though it has already gone through the regulatory process for stages 2 and 3. We must get on with it.
NW Upgrader says they can get $118 per barrel more by refining bitumen into diesel. Alberta is losing $15 billion/year by not being able to get our product to market. Stage 1 of the NW Upgrader was over budget for a total cost of $9.5 billion. That in itself is only two-thirds of what we are losing every year. The premier is talking about investing up to $7 billion to buy Kinder Morgan but that is no solution. Alberta will face the same opposition as Kinder Morgan; the solution is to refine our product here – and now.
It is a no-brainer from a financial perspective that an upgrader will pay off in the long run. Getting the capital may be a concern but $7 billion would be better invested in an upgrader than in a pipeline that will continue to face opposition. Despite the fact that there is refinery capacity available in other countries, if we can’t get the product to the refinery, we have no market. Rail might be a partial solution but we can only ship about a tenth of the volume by rail as we can by pipe.
So the solution, in my opinion is to change the pipeline application to ship refined products and get on with building both the pipeline and an upgrader so we can increase our capacity to ship to tidewater and develop an export market.
Just build it!
Ken Allred is a former St. Albert alderman and MLA.
