Transmountain Pipeline

The Keystone Pipeline extension is far better known to the public than this project. But I have been keenly interested in this one ever since the idea was first proposed. Like Keystone, there exists already a smaller pipeline, from Edmonton, Alberta to Burnaby, British Columbia. From the commercial hub of the oil sands district to the Vancouver Harbor to load oil tankers plying the Pacific Ocean.

So you need to know about it.

The basic idea is that this pipeline extends the middle finger to all of the people who have been resisting Keystone, and it is going to teach them a lesson. The environmentalists have been complaining since inception about the entire oil sands recovery operation. Basically they have been attempting to cut off a major source of petroleum. The oil sands are an unconventional source, admittedly the look form the air is pretty ugly, a blight visible from space on the frozen tundra of the north. but they also represent one of two single reserves of oil that are larger than all conventional underground reserves accessed by drilling. Together with Orinoco, the Athabasca oil sands could supply the world with sufficient petroleum for its needs for a hundred years or more to come.

My interest began with recognizing that Bush, Cheney & Co. were lying about the WMD’s and realizing that they were oil men, Iraq had to be about oil, and so I started investing in the oil sands earlier than most. In fact, through UTI I actually bought a piece of land in fort Hills, that I sold to Suncor years later for 10 times what I had paid for it.

Alberta's oil sands has the fourth-largest oil reserves in the world, after Venezuela, Saudi Arabia and Iran.

Alberta's oil sands’ proven reserves are equal to about 160.1 billion barrels (bbl).

Crude bitumen production (mined and in-situ) totaled about 3.3 million barrels per day (bpd) in 2021

(source: https://www.alberta.ca/oil-sands-facts-and-statistics.aspx)

(I think their estimates are low, from what I remember.)

The spot price for crude in Edmonton averages 23% lower than the price for WTI. Currently that is under $50/barrel. The main reason its so low is the location and the lack of sufficient takeaway capacity. It is pretty well known that Berkshire Hathaway, owner of Burlington Northern Railway, has benefitted enormously from carrying oil out of there in tank cars. This is a dangerous and expensive way to transport oil. Stopping Keystone did not stop the oil production, it only added to the costs and the environmental dangers.

So the whole point of the Transmountain Pippeline expansion is to bring oil from the oil sands to the ocean, where it can be loaded on ships and sold to China, since China is willing to pay far greater prices and they don’t care about the environmental issues. The net result will be that Canada will receive a better price for its oil and the USA will have to import more oil form the middle east and pay more for it (because the environmentalists and other demonstrators are still using, themselves, more oil than ever.)

The project has been plagued with problems and issues since its inception. Some of those of course have been provided by environmentalists from Canada and the USA, and the presumption is that they have been paid and goaded by Berkshire Hathaway. But others have been provided by the harsh terrain of the Canadian Rockies and several unusual weather events. Finding skilled workers has become more challenging despite the generous pay. The delays have been interminable. The cost overruns have been legendary.

https://www.transmountain.com/news/2023/trans-mountain-corporation-provides-update-on-the-expansion-project

At long last, the goal seems to be in sight. The terminal in Burnaby is ready. The pipeline is officially 80% completed, and it has been estimated that it will go into full operation within less than another year.

And once that happens a lot of things will change, forever.