Tuesday, August 07, 2018

J. Trudeau Memorial Pipeline Cost Soars Another Two Billion

The sketchy Texas outfit, Kinder Morgan, has come clean on the estimated costs of the new TransMountain pipeline.

Kinder Morgan Canada says expanding the Trans Mountain pipeline could cost the federal government as much as $1.9 billion beyond the company's original construction estimate and take 12 months longer to finish. 
The figures are included in documents the company filed Tuesday with the United States Security and Exchange Commission related to its plan to sell the pipeline to the Canadian government for $4.5 billion. 
The sale price does not include how much more Canadians will pay to finish twinning the pipeline between Alberta and British Columbia. Finance Minister Bill Morneau won't say how much Ottawa expects to spend on construction because he fears that would affect negotiations with construction contractors which are now underway.
...The most expensive scenario pegs construction costs at $9.3 billion, taking until December 2021 to complete -- a full year after the current timetable of December 2020. 
The government was quick to point out the figure is not an official cost forecast. An official in Morneau's department, speaking on background because he was not authorized to speak publicly, said the numbers do not specifically reflect the government's expectation of what the final project cost will be. 
However Robyn Allan, an independent economist and former CEO of the Insurance Corporation of British Columbia, said Kinder Morgan wouldn't evaluate the fairness of the sale based on numbers that have no bearing on reality. 
Allan, who said she has expertise on a number of multibillion infrastructure projects, believes in the end $9.3 billion will seem like a steal compared to the final price tag. 
"This is the least it's going to cost," said Allan. 
She said the biggest frustration is the lack of information coming from the federal government about the planned sale.
All of this for the sake of an agreement with Alberta on carbon pricing that the incoming Wild Rose premier, Jason Kenney, has no intention of honouring.  Well done, Team Trudeau. You've been had. No, we've been screwed.


Anonymous said...

Wait, "its plan to sell the pipeline ," "the planned sale" ... IOW, this isn't a done deal? What will it cost to walk away?


The Mound of Sound said...

Apparently there are no takers, Cap. The quick flip Morneau promised never materialized. What a shocking surprise. Now that Kinder Morgan has bumped the estimate another $2-billion, I think the chances of this government unloading the TransMountain are sinking rather fast.

The Kinder Morgan shareholders must be laughing their assess off.

Now, wait until the other shoe drops and Trudeau discovers the political price he'll pay for pushing through carbon pricing over the objection of Ontario, Saskatchewan and Alberta.

I'm sure Notley will console him with a "sorry, Justin, but I tried."

John's Aghast said...

FFS Junior! Throw in the towel! Walk away!
It was a bad deal before, gets worse as you proceed and will be a nightmare from Hell if you go through with this.
KM never had any intention of building this monstrosity. They couldn't afford it, and neither can I. Nor you.

Karl Kolchak said...

No sweat for little Justin. Like Obama, he will no doubt receive millions in corporate payola...er, paid speaking engagements, after he leaves office as a big thank you for a job well done.

the salamander said...

.. this useful but lame report from CBC

Typos abound.. 'golded' ?
and Dilbit magically becomes the 'benchmark Canadian oil'
measured again West Texas Intermediate benchmark
Currently Western Canadian Select... a Dilbit blend
is 'discounted' 30$ !! - approx 38.50 a barrel
WTI is approx 70$

I appreciate the CBC update..
but as always I rail against the mainstream habit
of conflating Dilbit with oil, Canadian Oil or Alberta Oil
when it is neither.. its a synthetic blend
to get Bitumin to move through a pipeline


Trans Mountain runs batches of different petroleum resources
through the pipeline, to Vancouver, separated of course
and then dispatched to different storage or other pipelines
Certainly there are many grades of Canadian or Alberta Oil
of ascending lightness or sweetness.. (less sulpher for openers)
and are coming from fracking sites & far older wells
that are found across Canada..

To pretend that offshore drill rigs do not deliver superior 'oil'
to the Bitumin Blend is laughable.. or Ontario wells
or those in Manitoba, Saskatchewan, Alberta or BC
but there goes CBC half assed, muddling the issues
CBC conflating it all together.. why ? we may never know

Deacon Jester said...

CBC is a government shill. Ignore them. They're meaningless now.

The Mound of Sound said...

You know, Sal, after so many years of our interactions, I'm coming to sense that, unless it's that rare moment where I disagree, all I'm left with is to read it and nod "yeah." You phrase these things in your own way but we're usually on the same page.

Anonymous said...

I think we're reading this differently. I read it as saying that KM is planning to sell the pipeline to the government. If so, then the deal hasn't been finalized and we may be able to get out of it.

I know that the government hasn't been able to find a buyer. If there were one out there I'm sure KM would already have found them. But everyone except Trudeau and Notley realizes there's no profit to be made in expanding pipeline capacity to a dying industry.


bill said...

Now more than ever it is critical that there appears signed long term commitments to purchase be produced. Either there is a market or not, just shipping it down the coast to u.s. refineries could be done far more safely by building a pipeline direct and taking tankers and barges out of the picture.

the salamander said...

.. 'yeah' ..

Haha.. Yes you zinged me a couple of times ! You are the generous host though & caught me in speculation. So never a worry. My style is meant as one time reads.. Your original articles or essays often take me 2 or 3 reads to absorb & come to grips with.. as they are widely diverse, seriously journalistic, scholarly, usually science driven.. but usually are a hard left hook a la Joe Frazier.

You have law degrees & vast political & legal background.. I am expert level at baling hay and raising Black Angus crossbreeds, bred artificially. I only got interested in 'politics' when Harper got a majority & attacked Canada's Environment, Habitat, Species & their defenders. Like many of your Indy fraternity, you're a daily 'must read'.. and often I must follow up via other sources on your topics to 'educate' myself somewhat.

I did have a useful career in freelance photography and high end video.. but now I am a house painter. Regardless, I am a voracious reader & writer .. and also approaching 30 thousand tweets via twitter, even have a small following. The point there being I write primarily in very short format via Twitter.. and follow and read twitter exemplars similar to you.. who often include links. Some day I may explore using my expert level PhotoShop skills with scathing or positive text overlaid.. some day. If you really don't have great stuff.. ie talent with such text bites.. or a willingness to 'borrow' imagery without permission.. then no wonder I aint ventured there.

Anyways.. I get it, the 'yeah' as most of what I isolate & detail in comments is no news to you. I just rage against partisanship, sloppy reportage, irresponsible media & slack ass 'journalism'.. it really is outrageous how lazy mainstream media can be.. they do like being spoon fed..

Keep up the fine work !

the salamander said...

.. a link for Bill

bill said...

Thanks Sal., I added the site to my reading list.

I still think the only way to force this issue is to focus on who are these new buyers in Asia and where are the agreements of understanding to purchase. Either there is a new market or not which will determine the best outcome. Just because Alberta wants to increase its output doesn't mean there is a long term market. This brings back the old argument that Alberta would be further ahead producing products out of their oil that they currently produce and selling those.

reminds me of a commercial 20 years ago "wheres the beef!"

Anonymous said...

Oh Notley knows all about Climate Change. She just wanted to have one last bang at the bat while the going was good. Forget it, it is all over now. There will be no pipe line doubling from Alberta to B.C. However, once the Junk yard dog has been voted in, there won't be a chance regarding Climate Change the Junk Yard Dog is going to remove the Carbon Tax just like the rouge in Ontario.

Anonymous said...

5:34...you are forgetting Newfoundland & Labrador and Nova Scotia.