Does the Trans Mountain pipeline still have a reason to exist?

In his recent column, Should the government kill the Trans Mountain pipeline project?, Max Fawcett makes the case that despite the recent revelation building costs for the project continue to spiral out of control and have hit $21.4 billion, the federal government should just bite the bullet and keep pouring taxpayers’ money into completing the pipeline.

The core of his argument seems to be that Trans Mountain will help Canadian oil producers get a better price for their product and that stopping Trans Mountain won’t reduce climate emissions.

The idea that there is a better price somewhere out there for tarsands crude stems from the fact that it sells for less than oil traded on the West Texas Intermediate (WTI) market. However, that is an apples to oranges comparison — WTI is a market for light oil with a low sulfur content, but tarsands crude is the exact opposite of that, a heavy oil with high levels of sulfur. They are different products, so naturally, they fetch different prices.

The proponents of this argument also ignore that other forms of oil produced in Alberta, including Syncrude, get a price almost identical to WTI in American dollars. The Syncrude blend is tarsands crude that has been through an upgrader to remove contaminants, including sulfur, and makes the oil easier to transport and refine. As of this writing, Syncrude was trading for $120.50/barrel, compared to $122.60/barrel for WTI and $105.30,/barrel for tarsands crude.

So it seems like oil companies that want to get the WTI price for their oil need more upgraders, not new pipelines. Why aren’t oil producers clamouring to build upgraders in Alberta then? Well, perhaps, it is because that actually creates more jobs (likely unionized) than building a pipeline, which creates very few jobs after the construction phase.

For the oil companies, there is more profit to be made from exporting unrefined oil to jurisdictions with low wages and lower environmental standards than in creating jobs here in Canada.

At this point you might be asking: But if Canada has such great environmental laws, doesn’t that make the tarsands cleaner or more ethical than other forms of oil? Sadly, this argument doesn’t hold water, either. Tarsands is much harder to extract and takes more energy to get out of the ground than conventional oil, and as a result, its carbon footprint is much larger. The Canadian oil industry has made a lot of noise about the incremental gains it has made to reduce its carbon intensity, but even with this limited progress, tarsands oil still emits 70 per cent more climate pollution per barrel produced than the global average.

Additionally, the tarsands leave behind a massive toxic legacy. Today, there are well over a trillion litres of toxic tarsands tailings in holding ponds in northern Alberta — and while this problem may not be new, it is headed towards an alarming decision point.

The federal government is currently considering new regulations that would allow the dumping of treated tarsands tailings directly into the Athabasca River, which would not only impact Wood Buffalo National Park, Canada’s largest national park and a World Heritage Site, it also puts the drinking water of downstream Indigenous communities at risk. That is not ethical, and it definitely isn't green.

It is time to be honest with Canadians: the tarsands is a high-carbon, high-cost source of oil, and in a world where we take climate change seriously, this is going to be amongst the first sources of oil to be phased out. You don’t have to take my word for it. The International Energy Agency, the United Nations Environment Program and the Intergovernmental Panel on Climate Change have all said that we must stop building these kinds of projects now if we want to have any kind of chance at avoiding the worst impacts of climate change.

Not only do we not need another pipeline, it is actually a roadblock to progress by being yet another massive subsidy to an industry that is Canada's largest and fastest-growing source of emissions. All of this is happening at a time when our government needs to be investing in the transition to a more diverse, sustainable economy.

Now is not the moment to be spending billions more of taxpayers’ money on Trans Mountain. It's time to admit this is a pipeline that just doesn’t have a reason to exist anymore.