A new study from Simon Fraser University and Living Oceans Society says that Kinder Morgan's Trans Mountain pipeline expansion project does not meet the National Energy Board's requirement of being in the public interest.
The study says the project, which would triple Kinder Morgan's capacity to carry oil between Alberta and Burnaby, B.C., could come at a net cost to Canada of between CAN$4.1 billion and CAN$22.1 billion.
Those costs are associated, not only with damage to the environment in the form of oil spills and greenhouse gas emissions, but also with building too much pipeline capacity, it says.
"Right now if you look at the projects that the National Energy Board has approved or is under consideration, these pipeline projects will exceed demand by about 2.5 million bpd by 2020," said Tom Gunton, SFU Director of the Resource and Environmental Planning Program, who led the study.
"Investing some CAN$20 billion in potentially empty pipeline space imposes a very large cost on Canada, to the oil and gas sector, to the Canadian public in terms of reduced taxes and royalties."
Gunton and his team argue that, by creating unnecessary capacity and diverting oil products from existing pipelines, oil and gas producers will lose out.
The latest study, is in stark contrast to Kinder Morgan's assessment of the project, which argues enormous economic benefits from the project, and for which it says environmental risks, particularly from oil tankers, will be mitigated by increased tug escorts in inland waters and beefed-up spill response capacity.
Kinder Morgan says the CAN$5.4 billion Trans Mountain project, which will triple capacity of its existing pipeline by twinning the pipeline to reach markets in Asia and the US, will provide CAN$45 billion in increased revenues to producers over 20 years and CAN$14.7 billion in additional revenue for government.
Edited from various sources by Elizabeth Corner
Sources: CBC, Vancouver Sun