Regulator rules in favour of Trans Mountain route deviation

CALGARY — The Canada Energy Regulator has approved Trans Mountain Corp.’s application to modify the pipeline’s route, a decision that could spare the government-owned pipeline project from an additional nine-month delay.

The regulator made the ruling Tuesday, just one week after hearing oral arguments from Trans Mountain and a B.C. First Nation that opposes the route change. 

It didn’t release the reasons for its decision Tuesday, saying those will be publicized in the coming weeks.

By siding with Trans Mountain Corp., the regulator is allowing the pipeline company to alter the route slightly for a 1.3-kilometre stretch of pipe in the Jacko Lake area near Kamloops, B.C., as well as the construction method for that section.

Trans Mountain Corp. had said it ran into engineering difficulties in the area related to the construction of a tunnel, and warned that sticking to the original route could result in up to a nine-month delay in the pipeline’s completion, as well as an additional $86 million more in project costs.

Trans Mountain has been hoping to have the pipeline completed by early 2024.

But Trans Mountain’s application was opposed by the Stk’emlúpsemc te Secwépemc Nation, whose traditional territory the pipeline crosses and who had only agreed to the originally proposed route.

In their regulatory filing, the First Nation stated the area has “profound spiritual and cultural significance” to their people, and that they only consented to the pipeline’s construction with the understanding that Trans Mountain would minimize surface disturbances by implementing specific trenchless construction methods.

The Trans Mountain pipeline is Canada’s only pipeline system transporting oil from Alberta to the West Coast. Its expansion, which is currently underway, will boost the pipeline’s capacity to 890,000 barrels per day (bpd) from 300,000 bpd currently.

The pipeline — which was bought by the federal government for $4.5 billion in 2018 after previous owner Kinder Morgan Canada Inc. threatened to scrap the pipeline’s planned expansion project in the face of environmentalist opposition and regulatory hurdles — has already been plagued by construction-related challenges and delays.

Its projected price tag has since spiralled: first to $12.6 billion, then to $21.4 billion and most recently to $30.9 billion (the most recent capital cost estimate, as of March of this year).

The federal government has already approved a total of $13 billion in loan guarantees to help Trans Mountain secure the financing to cover the cost overruns.

Trans Mountain Corp. has blamed its budget problems on a variety of factors, including inflation, COVID-19, labour and supply chain challenges, flooding in B.C. and unexpected major archeological discoveries along the route.

This report by The Canadian Press was first published Sept. 25, 2023.

Amanda Stephenson, The Canadian Press