Six months on, what has the Trans Mountain pipeline project achieved and what's next?

Nearly six months after its opening, the Trans Mountain pipeline expansion is boosting Canada's energy sector as promised — but questions still linger about who will pay for the project's massive cost overruns.

By a variety of measures, the expensive and contentious pipeline project is bearing fruit as more Canadian oil reaches the West Coast to be shipped to export markets.

The Trans Mountain pipeline carries crude oil from Alberta to the B.C. coast. Its expansion, which opened May 1, tripled the capacity of the existing pipeline, adding an additional 590,000 barrels per day of shipping capability.

That's massive for an industry that has long been pipeline-constrained — the Trans Mountain pipeline expansion accounts for 17 per cent of the total pipeline export capacity available to Canadian crude oil shippers, according to the Canada Energy Regulator.

Its construction was a lengthy, costly process. The Trans Mountain pipeline expansion was first proposed in 2012 by Kinder Morgan Canada, which encountered so much environmental and Indigenous opposition that it ultimately threatened to scuttle the project.

The federal government purchased the pipeline for $4.5 billion in 2018 in an effort to get the project over the finish line. Once construction did start, the project ran into numerous delays and budget overruns, with its price tag spiralling over the course of four years to an eye-popping $34 billion.

But now that it is completed, Canadian oil production is smashing records, and economists say Trans Mountain will provide a lift to the GDP of both the province of Alberta and Canada as a whole this year.

"It's really hard to overstate the importance of this pipeline," said Mark Parsons, chief economist at ATB Financial, in an interview.

"We really consider the Trans Mountain expansion a game-changer."

In a nutshell, the Trans Mountain expansion has brought an end — for now — to the transportation bottlenecks that for years kept a lid on the Canadian oil industry's ability to grow. With fresh ability to ship barrels out of Western Canada's oil-producing region, companies have been able to turn on the taps.

According to Canada Energy Regulator statistics, year-to-date crude oil production in this country as of the end of July 2024 averaged 5.0 million barrels per day. That's the highest on record, up from 4.8 million barrels on average at the same point in the year in 2023.

Year-over-year production growth of an additional 100,000 to 300,000 barrels per day will continue into 2025, said energy analyst Rory Johnston — making Canada one of the largest sources of crude oil output growth in the world.

"Growth ... of Canadian production is expected to continue as one of the major drivers of non-OPEC+ crude output into the next year," Johnston wrote in a recent edition of his Commodity Context newsletter.

While much of the oil unloaded from the Trans Mountain pipeline is being shipped by tanker to California, some is ending up in Asia. Canadian oil exports to Asia have gone from effectively zero prior to Trans Mountain entering operation to a monthly average of $325 million since May, according to ATB Financial.