It cost less to put a man on the Moon..The cost of building the long-awaited, long delayed Trans Mountain expansion to the West Coast has soared by another $9.5 billion to $30.9 billion — up from $12.6 billion when the Feds took over the embattled project in 2019 and $21.4 billion in early 2022. Initial estimates to build the line were pegged at $6.8 billion when it was first proposed in 2016..By comparison, the Apollo missions cost NASA a combined $25.8 billion US when it was concluded in 1973. The original Trans Mountain line from Edmonton to Vancouver cost $93 million when it was built in 1953, or roughly $1 billion in today’s dollars..In typical government fashion, the company made the announcement late on Friday afternoon. In a statement, it said the project is over 80% complete — that would be the Alberta portion — and blamed the overrun on finishing the final segment through the Lower Mainland, specifically: “high global inflation and global supply chain challenges; unprecedented floods in British Columbia; unexpected major archaeological discoveries; challenging terrain between Merritt and Hope; earthquake standards in the Burnaby Mountain tunnel; unexpected water disposal costs in the Sumas Prairie; and issues regarding densely populated areas between Sumas and Burnaby.”.Whew..The revised estimates bolster critics’ arguments the line is uneconomic. Indeed, after the latest estimates they may well have a point. Under long term shipping agreements the line — which was bought and paid for by the Liberal government for $4.5 billion — can’t legally pass on more than 20% of the capital costs to shippers in the form of higher tolls. The company said it is in the process of securing additional financing to cover the overrun..An economic assessment conducted by Ernst & Young in March 2023 concluded the project is estimated to contribute $52.8 billion in gross output, $26.3 billion in gross domestic product (GDP), including $11 billion in wages and more than 67,423 full-time equivalents (FTEs), and $2.9 billion in tax revenue since shovels went into the ground in 2018. After completion — expected in early 2024 — EY expects Trans Mountain’s expanded operations will contribute $17.3 billion in gross output, $9.2 billion in GDP, including $3.7 billion in wages and more than 36,066 full-time jobs, generating $2.8 billion in tax revenue over the next 20 years..In addition, Trans Mountain has generated more than $4.8 billion in contracts with Indigenous businesses, which is 25 per cent of total contracts awarded to date and has employed over 3,000 Indigenous workers, the company said..Once it is finished the capacity of the existing pipeline system will increase by 590,000 barrels per day (bpd) to a total of 890,000 bpd providing a much-needed outlet for Alberta oil sands producers to export barrels to Asia. So far 11 shippers have contracted 80% of the space on the line. By law the remaining 20% is left uncontracted for short term customers..Trans Mountain said it remains on track to deliver oil to its Westridge Marine Terminal in Burnaby during the first quarter of 2024. All pump stations across both provinces are complete and Berth 1 at the Westridge Marine Terminal is scheduled to be commissioned in May 2023.
