Professor Tom Gunton applying the lessons from TMX to the current pipeline moment

[Ruth Walmsley]

Hello BROKE folk,

For those of you who are not on the Brunette Signal group, I thought you would find this interesting: from Tom Gunton via Tim Takaro:

Greetings !
Here's IISD’s latest research from Professor Tom Gunton applying the lessons from TMX to the current pipeline moment.
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> If you’d like to share Tom's findings, there's a social media pack here.
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> Tom's takeaways:
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> Building a new oil pipeline would be a costly mistake for both Alberta and Canada. World oil demand is likely to peak in the next few years, and existing pipelines have the potential to provide adequate capacity at lower cost and risk.
> As the Trans Mountain Pipeline (TMX) shows, building new pipelines is risky because of cost overruns. The TMX was originally forecast to cost CAD 5.4 billion and ended up costing CAD 34.2 billion.
> The TMX pipeline is not recouping its costs. Because the tolls charged to the oil industry do not cover the full project costs, Canadian taxpayers could end up subsidizing oil shipments by between CAD 8.7 billion and CAD 18.8 billion, or up to CAD 1,255 per household, over the life of the project.
> A new pipeline would have to charge significantly higher tolls than existing pipelines to cover the high construction costs. Higher tolls on a new pipeline would result in lower returns to the oil industry and lower royalty payments to government relative to using lower cost expansion options on existing pipelines.
> A new pipeline to British Columbia’s North Coast would require lifting the current oil tanker moratorium, posing a significant risk of a devastating oil tanker spill.
> All major project proposals should be subject to a cost-benefit study and should not proceed if they do not create a net benefit to Canada. A new oil pipeline is unlikely to meet this standard and is inconsistent with Canada’s emission obligations.
> Pipelines and fossil fuel projects should not receive public subsidies. The subsidies currently being provided to oil companies using the TMX should be removed by applying a cost-recovery levy on oil shipments to cover the full construction costs.

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