Why Canada likely won't need any more big new oil pipelines after Trans Mountain

Construction of the Trans Mountain expansion project is set to wrap up later this year, and it's likely the last new oil export pipeline the country will ever need.

The pipeline has faced many obstacles over the years, including protests, court challenges and massive cost overruns. Last week, the cost of the federally owned project was updated to more than $30 billion.

Over the last decade, several other high-profile pipeline proposals have faltered, but the Trans Mountain expansion is more than 80 per cent built, and oil is expected to start moving in early 2024.

As oil production growth slows in Alberta, some in the industry suspect there won't be a need for any more new oil export pipelines.

"I think we'll be good," Alex Pourbaix, president and CEO of Cenovus Energy, said in an interview.

"I don't think we're going to see another large-scale liquid pipeline coming forward, certainly in the next decade."

When the Trans Mountain expansion was first pitched more than a decade ago, the proposal seemed relatively straightforward, since the project would twin an existing pipeline largely along the same route. In addition, the pipeline wouldn't cross multiple borders, running from Alberta to British Columbia.

For the first few years after the project was announced in 2012, it received very little attention — especially as the spotlight was on other pipeline proposals, such as Northern Gateway, Energy East and Keystone XL.

Still, as those projects faltered and the Trans Mountain expansion neared construction, the scrutiny quickly followed.

There were protests from Indigenous communities and environmental advocates; political battles between Alberta and B.C.; regulator and court challenges; and many other obstacles that caused more delays, uncertainty and expenses.

The Trans Mountain project was bought by the federal government for $4.5 billion in 2018, after previous owner Kinder Morgan Canada Ltd. — which was acquired by Pembina Pipeline Corp. in December 2019 — threatened to scrap the pipeline's planned expansion project in the face of environmental opposition, legal challenges and political risk.

The cost of the project has escalated over the years because of several factors, including global inflation and supply chain challenges, severe floods in British Columbia, route changes, challenging terrain and security expenses.

Despite all of the problems, experts say the economic case for the pipeline remains, since it will allow Canadian oil to reach the coast and fetch a better price than shipping it to the United States, where the majority of Canadian oil flows.

The industry also needs another export channel, since existing pipelines are running out of space.