BC’s Energy Resource Development Challenges

There are three major resource developments in BC that soon could undergo substantial modification: the Trans Mountain Pipeline Expansion (TMX), the Site C Dam on the Peace river, and LNG development with its concomitant hydraulic fracturing (fracking) and pipeline construction through unceded First Nations territory.

TMX is now owned by the government of Canada through the crown corporation, Trans Mountain. The original Trans Mountain Pipeline was built in 1953 and it stretches 1150 km from Edmonton to Burrard Inlet. The expansion will increase its capacity from 300,000 to 890,000 barrels per day. The expansion is projected to cost (2015 est) $12.6 billion on top of the purchase price of $4.5 billion for the original pipeline from its Texas-based owners.

The originally expected economic return from the development, assuming that market conditions remain constant, for the first 20 years following completion is $46.7 billion ($5.7 billion to BC, $19.4 billion to Alberta, and $21.6 billion to Canada).

It was believed that offshore markets would pay more for the dilbit (diluted bitumen) from the oil sands than US markets (the necessary refinery facilities don’t exist in Canada). But subsequent evaluations show that this has changed (news and opinion piece from SFU prof):

Serious geotechnical problems have surfaced that have led to the call to pause or cancel the Site C Dam construction. The call is strengthened by the strain on BC finances from the COVID-19 pandemic.

Top BC civil servants and a senior bureaucrat who prepares material on Site C for cabinet knew of these problems in May 2019. BC Hydro has been unenthusiastic to agree, but agrees that “unknown cost overruns, schedule delays, and such profound geotechnical that its overall health is now classified as ‘red'” mean that the project is in “serious trouble”.

Site C was conceived at least partially to supply energy for LNG development and oil sands extraction.

We have already had a discussion about the Wet’suwet’en objections to the Coastal Gaslink pipeline and the environmental problems associated with LNG development (March 4, 2020). So we won’t go into that controversy further here.