Whoops! Canadian Pipeline Project Burns Through Mountains of Cash


All records are made to be broken, but never in wildest imagination could one imagine a Northwest cost debacle threatening to exceed the overruns, construction hitches, contractor shakeups and completion delays that struck the Washington Public Power Supply System’s efforts to build five nuclear plants at once in the late 1970s and early 1980s.

But WPPSS has met its match, perhaps its master. The wooly mammoth went extinct in North America thousands of years ago, but a great white elephant is going to ground in British Columbia. The Trans Mountain pipeline expansion was originally pegged at $5.4 billion (Canadian) when initially planned in 2013, with completion planned for late 2017.

The project was mired in controversy when purchased for $4.7 billion by the Canadian federal government in 2018 but has since soared to $12.6 billion (2020), $21.48 billion (2022), and $30.9 billion (2023). Its latest planned completion date, set for late 2024, has encountered a hitch in how the pipeline will cross Indigenous territory and a lake east of Kamloops.

By contrast, the WPPSS construction program went from a $4.1 billion original estimate, to $6.7 billion (first official estimate), and ultimately $24.5 billion. Four of the five partially built reactors sit forlorn and abandoned at Hanford and Satsop. The one completed project cost $3.2 billion when completed in 1984, 12 years after a red headline in the Tri-City Herald announced: “$450 Million Nuclear Plant Started.”

Big construction projects have big cost overruns, as well as outsized rationales. WPPSS blamed changing Nuclear Regulatory Commission regulatory requirements and the high cost of borrowing money. A Washington State Senate investigation put a finger on mismanagement. The Seattle City Council voted not to buy into the ill-fated WPPSS 4 and 5 reactors. Amidst construction chaos, Merrill-Lynch tried to sell high-interest WPPSS bonds by producing campaign buttons with the message: “I’m Bullish on the Supply System.”

Trans Mountain ascribes 55 percent of its latest (2022-23) cost overruns to such factors as “engineering and plan maturity” as well as “schedule pressures and productivity challenges.” Robyn Allen, an independent economist who has studied the project, told Global TV News: “What really concerns me is that if they’re still doing design and engineering planning at this stage, they haven’t known what they were doing.” Trans Mountain, in turn, uses words of blame familiar from the WPPSS days: “Some contractors’ work product did not perform at previously estimated levels.”

Other factors include the COVID-19 pandemic, requirements of protecting the environment, satisfying some Aboriginal First Nations. And, in November of 2021, an enormous atmospheric river pounded the Coquihalla, Hope, and Fraser Valley sections of the project. Actions outside its control – COVID-19, extreme heat, and wildfires – have added $1.4 billion to project costs, claims Trans Mountain.

The 1,150-kilometer pipeline is intended to carry bitumen crude oil, extracted from the tar sands of northern Alberta, from Edmonton down to the Westridge Marine Terminal in Burnaby, just east of Vancouver and just below Burnaby Mountain atop which sits Simon Fraser University. It follows the path of an existing pipeline, built in the 1950s, and will boost capacity to 890,000 barrels a day.

Prime Minister Justin Trudeau has pursued a policy one analyst describes as “pipelines and wind turbines,” moving to cap carbon emissions while championing a key piece of the carbon economy. The pipeline is intended to bring oil to a saltwater port where it can be exported to Asia and the U.S. West Coast. As Trudeau vows to cut carbon emissions, he nonetheless says, Trans Mountain will develop  “a market for our natural resources.” In the PM’s words, “Access to world markets for Canadian resources is a core national interest. The Trans Mountain expansion will be built.” But there are severe potential pains to go with the gains. Traffic, in and out of the Burnaby oil port, will go from 60 tankers a year to 400. The tankers will traverse Burrard Inlet, Haro Strait – which separates the San Juan Islands from British Columbia’s Gulf Islands – and head out the Strait of Juan de Fuca. 

The route through sensitive marine waters passes national, provincial and state parklands. The entrance to the Strait is flanked by our Olympic National Park and Canada’s Pacific Rim National Park. Oil spills have occurred there. The Canadian Coast Guard has been sluggish and inept in its response.  (An excellent view of the tanker route can be had from Deer Park in the Olympics.)

Expansion was the idea of the Houston-based owner of the pipeline. In words of Canadian environmental scientist Blair King, “When Kinder Morgan proposed the pipeline, it had simple plans. Build a pipeline for $4.6-$7 billion and then sell space (tolls) on the pipeline at a price that allowed it to recoup its costs plus generating profit for its shareholders.”

That was then. The expansion generated an environmental uproar. Sit-ins and encampments took outside the Burnaby terminal. Two members of the House of Commons, Green Party leader Elizabeth May and future Vancouver Mayor Kennedy Stewart, were arrested. So was TV host and famous environmental scientist David Suzuki, alongside his environmentalist-snowboarder grandson Tamo Campos. (The arrests were later thrown out.)

The pipeline “will never be built,” vowed Stewart Phillip, Grand Chief of the Union of British Columbia Indian Chiefs. Added Ian Campbell, Squamish Indian chief: “For us, we inherit the majority of risk because this is where the pipeline is.”

Kinder Morgan threatened to bail, saying it was held up by protests and shifting governmental regulations. At that point, Trudeau stepped in. Alberta is the center of Canada’s “oil patch” and its holy grail is getting oil to a saltwater port from which it can be exported. The Obama and Biden administrations have put the kibosh on the Gulf-bound Keystone XL pipeline.

When his government took office in 2017, British Columbia Premier John Horgan vowed to use “every tool in our toolbox” to stop the pipeline. Joining him, and warning about oil spills, Gov. Jay Inslee said Washington state would “do everything we can under Canadian law” to fight the project, adding: “This does not move us toward a clean energy future.”

A Canadian appeals court flagged Trans Mountain for not adequately engaging with Aboriginal First Nations and not assessing impacts increased tanker traffic would have on orca whales.  Ultimately, in June of 2020, the Supreme Court of Canada turned aside challenges from both British Columbia and Indigenous groups.  Support for the pipeline expansion came not just from Alberta, but as a job generator in interior B.C.: It currently employs 13,500 people.

The pipeline expansion route is no flatland dig. It passes through the Canadian Rockies, runs down the Thompson River past Kamloops, plows through provincial parks and crosses another mountain range until reaching Hope, then runs down the Fraser Valley and crosses under the Fraser River. A recent costly hitch has developed.

At this late hour – it claims the project is 80 percent complete – Trans Mountain wants Canadian energy regulators to approve yet another change in construction methods and route. It was going to use a least-disruptive plan in passing through Jacko Lake east of Kamloops. with micro-tunneling and taking the pipeline under the lake. Now, however, TM wants a more disruptive and direct route through Indigenous lands.

Known, too, as Pipsell Lake, Jacko Lake is renowned for trout fishing, home to or visited by 130 species of birds, 40 species of mammals, and rattlesnakes. Human artifacts dating back 7,000 years have been found at the lake. Not surprisingly, the lake is a source of “historic, cultural and spiritual connection” to Indigenous peoples. “There is no amount of money that Canada has, that can replace a site that’s sacred,” said Raymond Cardinal of a group called SS1 First Nations. The row over Jacko Lake is expected to jack up costs even further and may jeopardize next year’s completion schedule.

“Megaprojects” are a part of Canada’s development psyche. Some have proven visionary, such as the big James Bay hydro project in Quebec. Others have become fiascos, such as British Columbia’s attempt to build fast ferries, or B.C.’s $16 billion Site C dam project on the Peace River, whose costs have more than doubled. Also, Site C and Trans Mountain are competing for workers, creating a labor shortage.

Nothing to see here, and taxpayers won’t get hit with the bill — or so claims Canada’s federal government. “Trans Mountain will secure necessary funding to complete the project through third party financing, either the public debt market or with financial institutions, Finance Minister Chrystia Freeland told parliament.

Trans Mountain is bullish on markets once the pipeline is built: “As countries begin to develop the same quality of life we enjoy here in Canada, they need to secure sources of energy.” (At the expense of the planet?) But Robyn Allen, former chair of the Insurance Corp. of British Columbia, argues the pipeline is “not commercially viable,” adding: “This is a huge taxpayer burden that we’re facing.”

Nobody has defended the pipeline project more vocally than Richard Masson, chairman of the World Petroleum Congress in Canada. “Having another source of Canadian oil is a big deal,” he said recently, but conceded: “So it’s really costing more than anyone would have dreamed at the beginning.”

The Canadian government says it wants to eventually get out of the pipeline business and sell the completed Trans Mountain.  Masson has some bad news: “If the federal government is going to want to sell this, they’re going to have to take a write-down and sell it at a much reduced value compared to what has been spent so far.”

Joel Connelly
Joel Connelly
I worked for Seattle Post-Intelligencer from 1973 until it ceased print publication in 2009, and SeattlePI.com from 2009 to 6/30/2020. During that time, I wrote about 9 presidential races, 11 Canadian and British Columbia elections‎, four doomed WPPSS nuclear plants, six Washington wilderness battles, creation of two national Monuments (Hanford Reach and San Juan Islands), a 104 million acre Alaska Lands Act, plus the Columbia Gorge National Scenic Area.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comments Policy

Please be respectful. No personal attacks. Your comment should add something to the topic discussion or it will not be published. All comments are reviewed before being published. Comments are the opinions of their contributors and not those of Post alley or its editors.