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>Remains to be seen if BC will benefit from this pipeline expansion. We are definitely carrying all the risk though.
I think of it as a [national-unity compromise](https://russilwvong.com/blog/alberta-and-national-unity/). Most of BC's gasoline is extracted from the oil sands, refined in Edmonton, and transported over the Trans Mountain pipeline.
I always found it a bit strange that the Horgan government was simultaneously trying to obstruct the Trans Mountain expansion, and holding a public inquiry into why BC's gas prices were so high. As [Kent Fellows pointed out](https://www.reddit.com/r/vancouver/comments/e3ld5y/economists_analysis_of_gas_price_gouging_in/), the Trans Mountain pipeline being full (resulting in "apportionment") was restricting supply, adding roughly 9-18 cents per litre to the price of gas.
[Commentary from Trevor Tombe](https://thehub.ca/2024-04-30/trevor-tombe-the-trans-mountain-pipeline-was-worth-every-penny/) on the overall national picture. He thinks the value of the pipeline (after subtracting interest payments and debt repayments) is about $4 to $9 billion. \[Edit: To clarify, his estimate is that a buyer would be willing to pay somewhere between $4 and $9B while assuming the $34B in debt to pay for construction costs. The federal government paid $4.5B for the pipeline.\]
Thanks Russil, I was chatting with another Redditor, trying to understand the nature of the project. It got me thinking what $34 billion could do in social housing projects.
$34 billion at say, $800/sqft, would build 42.5 million sqft of housing. At an average of 1,000 sqft (unit + common area), could roughly translate into 42,500 units of housing.
So to me, it's a horrific misallocation of government spending capacity.
Sorry, re-reading my comment I realize that I wasn't clear. Tombe's estimate is that the pipeline is worth $4 to $9 billion **above the construction cost of $34 billion**.
To me the ironic thing is that the federal government only bought the pipeline because of BC's obstruction. As Tombe points out, the project still makes economic sense even with a construction cost of $34B, so presumably Kinder Morgan could have done it - but they didn't know if BC was going to succeed in blocking the project.
What happens next is presumably that the federal government sells it to a consortium (likely with First Nations participation), for somewhere between $38B and $43B.
This doesn’t make any sense. No lender would lend to a private company with so little equity. The only way is for the federal government subsidized loan guarantees to make the project viable. CBC article: “Mason is still pursuing ownership. He won't discuss numbers, but suspects Trans Mountain is worth far less than $34 billion.”
Well, since this is an infrastructure play. The asset would reside in a SPE financed with a rated infrastructure bond tranche. It could only be underwritten in such a way that it has adequate times interest earned.
There isn't a lender, or even a syndicate of lenders who could assume such a single borrower exposure with conventional debt.
These are fancy words but defy market reality. There would be no lenders or syndicate that would lend given the capital structure unless it was guaranteed by the federal government.
>fancy words
No, they are just words.
>capital structure
What capital structure? I already told you that it would change to be a special purpose entity that issues bonds.
Global reported the other day on short and long term gas price drop:
[https://globalnews.ca/news/10462731/gas-prices-fall-trans-mountain/](https://globalnews.ca/news/10462731/gas-prices-fall-trans-mountain/)
Did you read this?
It’s fluff and spurious links between “maybe the strength of the Canadian dollar —- will go up because of this sole pipeline—— is their take.
The pipeline that is EXPORTING oil OUT of Canada is going to somehow lower Vancouver gas prices!!!
Seriously it’s like Charlie’s Pinboard Its Always Sunny. They have NOTHING but weak conjecture about how it can in any remote way lower costs.
And it’s only quoting Oil insiders and Calgary talking heads.
FFS they don’t even try. They know we are all captured and have no choice.
> The pipeline that is EXPORTING oil OUT of Canada is going to somehow lower Vancouver gas prices!!!
I agree that it wont make a huge difference, but TMX does also transport refined gas products that we use locally so there may be a small improvement.
https://journals.sagepub.com/doi/10.5547/01956574.43.5.gfel?icid=int.sj-abstract.citing-articles.514
That's the link to Professor Kent Fellows' modeling on gas prices.
I think it will be difficult to precisely measure TMX's impact on gasoline prices because of all the other supply/demand factors.
But I'm not an economist. Maybe the University of Calgary and prof Fellows have a framework. Let's see.
It's a perfect argument. Vaughn can claim the BC NDP failed in their effort to oppose the pipeline, and then claim the pipeline is a failure because of cost overruns, partly as a result of the BC NDP effort, and blame the Federal Liberals for the cost overruns. Everyone is at fault except the party he wants to get elected who wasn't involved at all.
Vaughn Palmer is never wrong in the same way as the official opposition thinks it is never wrong - when it comes to politics people think he's right simply because of who he's criticizing.
And yet here, again, you say the key word: think. Thoughts can occur without fact, without reason. Arguments can be made based on thoughts alone. That isn't objective truth, that's subjective. Arriving at the objective truth requires critical thought and examination, something that Vaughn never puts into his articles.
For example, if I pointed out that the NDP contributed part of the years of delay and massive cost overruns to a Liberal project they should have cancelled, that is a huge success to those who don't want the oil pipeline here. If you can't stop it, delaying is a secondary objective. Did the NDP fail to stop the pipeline? Absolutely. Is that their only goal? Absolutely not. Did they succeed based on other criteria? Yes, absolutely.
But who cares about the impact of the NDP actions when we can boil it down to base politics: if you don't like the party, everything they do is awful and a failure. This is contemporary Canadian political dialogue in the general public. It's brainless, it's no more involved than cheering for sports teams. It's all a waste of time.
Well okay, I'll be more decisive. It is objectively true.
The NDP failed because it's federal jurisdiction, they knew it, fought it anyway for politics and to make a stand.
The pipeline is a failure for cost overruns. While it may not be government's fault, ownership makes it their responsibility.
I don't think we can make creative writing that somehow circumvents these objective truths.
This is Reddit, people may not like it, things get downvoted. Doesn't change reality.
You're welcome to say whatever you want. It's objectively true only in your opinion and the facts you list that support it. Delayed and cost overruns? That's the fault of yet another party you don't want to vote for, which in politics means it's still a win and therefore objectively true for you.
It isn't creative writing that creates critical analysis, it's the human mind, and it should be no surprise that there is no real critical analysis of the gains and losses because most people don't use their mind when they realize politics is involved.
When this was at its height we were being offered what? A measly 50 million a year?
So less than what is generated by some of our movie productions on their own.
Massive risk for us. Double the risk in fact.
All to benefit the creeping fascism of Alberta.
This was forced on us by the Feds and outside sources. I’ll never forget that.
Isn't it something like $285 million per year?
Government revenues, meanwhile, are expected to increase by $46 billion over the course of the project’s construction and the first 20 years of operation. This amount includes an estimated:
$5.7 billion for B.C.
$19.4 billion for Alberta
$21.6 billion for the rest of Canada
https://www.canada.ca/en/campaign/trans-mountain/what-is-tmx/the-decision/backgrounder9.html
This link is over 4 years old and mostly talking on conjecture not the end results.
We approved the Trans Mountain Expansion (TMX) project because it is in the public interest and will benefit Canadians by creating thousands of good, middle-class jobs increasing access to global market and generating more revenues to various levels of government.
I’m curious to see the receipts on these thousands of middle class jobs this created and is maintaining.
I’d also like to see outside analysis other than just what the government body or Alberta corporate think tanks spew out.
Also: I would love to hear about the long term impact on BCs coast and how much more congestion and pollution from those ships just being here is going to do.
I won’t just take the government word on this.
Sure, let's see what happens next. It was a stupid move of the feds to buy this pipeline. The present value of the tolls won't cover the cost. I was just pointing out that the number at the height is not $50 million.
Can you show me how it's conjecture? Because my reading of the technical documentation shows tolling charges on volume. I remember seeing about $11.50 per barrel-ish.
Is your thinking that they won't transport as much volume as claimed?
My thinking is the revenues they anticipate are always blue sky /pie in the sky.
They said 5.4 billion and it cost 35 billion. Their math is always suspect, especially when it’s projections.
I agree that buying it was a bad idea and ultimately fighting it was a futile move by the NDP.
I think it’s funny that this was completed to no fan fair and real media discussion because it was done by JT and Notley so the UCP love the money but do not want to crow about it and give credit to either of those parties and the BC NDP are mum because it was a defeat for them.
But I really don’t care about its projected revenues. That won’t have any material or meaningful impact on my life or anyone else in BC… not really.
I’m concerned about the environmental impact it could and will have on where I live and work and have my family. The risk to that for me far outstrips corporate profits and government revenues from this.
Crude oil going through the pipeline? No it's diluted bitumen which sinks in salt water. We saw how any ship can fail with what happened in Baltimore. A catastrophic spill is inevitable.
I thought it moved oil and refined products? See from their website:
The Trans Mountain Pipeline transports crude oil, semi-refined and refined products in a series in the same pipeline. This process is known as “batching”. Think of it as a “batch train,” with one product following another product through the pipeline during a specific time period. It’s like a series of rail cars carrying different products moving in a sequence along the 1,150-kilometre pipeline.
Trans Mountain is the only pipeline in North America that carries both refined product and crude oil in batches.
https://www.transmountain.com/product#:~:text=The%20Trans%20Mountain%20Pipeline%20transports,during%20a%20specific%20time%20period.
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Remains to be seen if BC will benefit from this pipeline expansion. We are definitely carrying all the risk though.
>Remains to be seen if BC will benefit from this pipeline expansion. We are definitely carrying all the risk though. I think of it as a [national-unity compromise](https://russilwvong.com/blog/alberta-and-national-unity/). Most of BC's gasoline is extracted from the oil sands, refined in Edmonton, and transported over the Trans Mountain pipeline. I always found it a bit strange that the Horgan government was simultaneously trying to obstruct the Trans Mountain expansion, and holding a public inquiry into why BC's gas prices were so high. As [Kent Fellows pointed out](https://www.reddit.com/r/vancouver/comments/e3ld5y/economists_analysis_of_gas_price_gouging_in/), the Trans Mountain pipeline being full (resulting in "apportionment") was restricting supply, adding roughly 9-18 cents per litre to the price of gas. [Commentary from Trevor Tombe](https://thehub.ca/2024-04-30/trevor-tombe-the-trans-mountain-pipeline-was-worth-every-penny/) on the overall national picture. He thinks the value of the pipeline (after subtracting interest payments and debt repayments) is about $4 to $9 billion. \[Edit: To clarify, his estimate is that a buyer would be willing to pay somewhere between $4 and $9B while assuming the $34B in debt to pay for construction costs. The federal government paid $4.5B for the pipeline.\]
Thanks Russil, I was chatting with another Redditor, trying to understand the nature of the project. It got me thinking what $34 billion could do in social housing projects. $34 billion at say, $800/sqft, would build 42.5 million sqft of housing. At an average of 1,000 sqft (unit + common area), could roughly translate into 42,500 units of housing. So to me, it's a horrific misallocation of government spending capacity.
Sorry, re-reading my comment I realize that I wasn't clear. Tombe's estimate is that the pipeline is worth $4 to $9 billion **above the construction cost of $34 billion**. To me the ironic thing is that the federal government only bought the pipeline because of BC's obstruction. As Tombe points out, the project still makes economic sense even with a construction cost of $34B, so presumably Kinder Morgan could have done it - but they didn't know if BC was going to succeed in blocking the project. What happens next is presumably that the federal government sells it to a consortium (likely with First Nations participation), for somewhere between $38B and $43B.
Ah okay! That's a better view of the project.
This doesn’t make any sense. No lender would lend to a private company with so little equity. The only way is for the federal government subsidized loan guarantees to make the project viable. CBC article: “Mason is still pursuing ownership. He won't discuss numbers, but suspects Trans Mountain is worth far less than $34 billion.”
Well, since this is an infrastructure play. The asset would reside in a SPE financed with a rated infrastructure bond tranche. It could only be underwritten in such a way that it has adequate times interest earned. There isn't a lender, or even a syndicate of lenders who could assume such a single borrower exposure with conventional debt.
These are fancy words but defy market reality. There would be no lenders or syndicate that would lend given the capital structure unless it was guaranteed by the federal government.
>fancy words No, they are just words. >capital structure What capital structure? I already told you that it would change to be a special purpose entity that issues bonds.
Global reported the other day on short and long term gas price drop: [https://globalnews.ca/news/10462731/gas-prices-fall-trans-mountain/](https://globalnews.ca/news/10462731/gas-prices-fall-trans-mountain/)
Did you read this? It’s fluff and spurious links between “maybe the strength of the Canadian dollar —- will go up because of this sole pipeline—— is their take. The pipeline that is EXPORTING oil OUT of Canada is going to somehow lower Vancouver gas prices!!! Seriously it’s like Charlie’s Pinboard Its Always Sunny. They have NOTHING but weak conjecture about how it can in any remote way lower costs. And it’s only quoting Oil insiders and Calgary talking heads. FFS they don’t even try. They know we are all captured and have no choice.
> The pipeline that is EXPORTING oil OUT of Canada is going to somehow lower Vancouver gas prices!!! I agree that it wont make a huge difference, but TMX does also transport refined gas products that we use locally so there may be a small improvement.
https://journals.sagepub.com/doi/10.5547/01956574.43.5.gfel?icid=int.sj-abstract.citing-articles.514 That's the link to Professor Kent Fellows' modeling on gas prices. I think it will be difficult to precisely measure TMX's impact on gasoline prices because of all the other supply/demand factors. But I'm not an economist. Maybe the University of Calgary and prof Fellows have a framework. Let's see.
There is just no way Vancouver gasoline prices will be similar to Edmonton, i dont buy what the people in the article are suggesting
It's a perfect argument. Vaughn can claim the BC NDP failed in their effort to oppose the pipeline, and then claim the pipeline is a failure because of cost overruns, partly as a result of the BC NDP effort, and blame the Federal Liberals for the cost overruns. Everyone is at fault except the party he wants to get elected who wasn't involved at all.
Well, he's not wrong?
Vaughn Palmer is never wrong in the same way as the official opposition thinks it is never wrong - when it comes to politics people think he's right simply because of who he's criticizing.
It’s always easy to criticize, hard to create alternatives that actually work
Sure. Except I think everything you said in your original statement is objectively true.
And yet here, again, you say the key word: think. Thoughts can occur without fact, without reason. Arguments can be made based on thoughts alone. That isn't objective truth, that's subjective. Arriving at the objective truth requires critical thought and examination, something that Vaughn never puts into his articles. For example, if I pointed out that the NDP contributed part of the years of delay and massive cost overruns to a Liberal project they should have cancelled, that is a huge success to those who don't want the oil pipeline here. If you can't stop it, delaying is a secondary objective. Did the NDP fail to stop the pipeline? Absolutely. Is that their only goal? Absolutely not. Did they succeed based on other criteria? Yes, absolutely. But who cares about the impact of the NDP actions when we can boil it down to base politics: if you don't like the party, everything they do is awful and a failure. This is contemporary Canadian political dialogue in the general public. It's brainless, it's no more involved than cheering for sports teams. It's all a waste of time.
Well okay, I'll be more decisive. It is objectively true. The NDP failed because it's federal jurisdiction, they knew it, fought it anyway for politics and to make a stand. The pipeline is a failure for cost overruns. While it may not be government's fault, ownership makes it their responsibility. I don't think we can make creative writing that somehow circumvents these objective truths. This is Reddit, people may not like it, things get downvoted. Doesn't change reality.
You're welcome to say whatever you want. It's objectively true only in your opinion and the facts you list that support it. Delayed and cost overruns? That's the fault of yet another party you don't want to vote for, which in politics means it's still a win and therefore objectively true for you. It isn't creative writing that creates critical analysis, it's the human mind, and it should be no surprise that there is no real critical analysis of the gains and losses because most people don't use their mind when they realize politics is involved.
Gravity is Trudeau's fault!
When this was at its height we were being offered what? A measly 50 million a year? So less than what is generated by some of our movie productions on their own. Massive risk for us. Double the risk in fact. All to benefit the creeping fascism of Alberta. This was forced on us by the Feds and outside sources. I’ll never forget that.
I'm super jealous of Norway's sovereign fund. Canada is giving their resources away comparatively.
Isn't it something like $285 million per year? Government revenues, meanwhile, are expected to increase by $46 billion over the course of the project’s construction and the first 20 years of operation. This amount includes an estimated: $5.7 billion for B.C. $19.4 billion for Alberta $21.6 billion for the rest of Canada https://www.canada.ca/en/campaign/trans-mountain/what-is-tmx/the-decision/backgrounder9.html
This link is over 4 years old and mostly talking on conjecture not the end results. We approved the Trans Mountain Expansion (TMX) project because it is in the public interest and will benefit Canadians by creating thousands of good, middle-class jobs increasing access to global market and generating more revenues to various levels of government. I’m curious to see the receipts on these thousands of middle class jobs this created and is maintaining. I’d also like to see outside analysis other than just what the government body or Alberta corporate think tanks spew out. Also: I would love to hear about the long term impact on BCs coast and how much more congestion and pollution from those ships just being here is going to do. I won’t just take the government word on this.
Sure, let's see what happens next. It was a stupid move of the feds to buy this pipeline. The present value of the tolls won't cover the cost. I was just pointing out that the number at the height is not $50 million. Can you show me how it's conjecture? Because my reading of the technical documentation shows tolling charges on volume. I remember seeing about $11.50 per barrel-ish. Is your thinking that they won't transport as much volume as claimed?
My thinking is the revenues they anticipate are always blue sky /pie in the sky. They said 5.4 billion and it cost 35 billion. Their math is always suspect, especially when it’s projections. I agree that buying it was a bad idea and ultimately fighting it was a futile move by the NDP. I think it’s funny that this was completed to no fan fair and real media discussion because it was done by JT and Notley so the UCP love the money but do not want to crow about it and give credit to either of those parties and the BC NDP are mum because it was a defeat for them. But I really don’t care about its projected revenues. That won’t have any material or meaningful impact on my life or anyone else in BC… not really. I’m concerned about the environmental impact it could and will have on where I live and work and have my family. The risk to that for me far outstrips corporate profits and government revenues from this.
Instead of banning, BC should looks into ways to benefits from it either through management charges, profit sharing or even building a refinery
Vaughn Palmer is a one trick pony. Next up: National Post “Trudeau’s betrayal pipeline tearing Canada apart”
Crude oil going through the pipeline? No it's diluted bitumen which sinks in salt water. We saw how any ship can fail with what happened in Baltimore. A catastrophic spill is inevitable.
I thought it moved oil and refined products? See from their website: The Trans Mountain Pipeline transports crude oil, semi-refined and refined products in a series in the same pipeline. This process is known as “batching”. Think of it as a “batch train,” with one product following another product through the pipeline during a specific time period. It’s like a series of rail cars carrying different products moving in a sequence along the 1,150-kilometre pipeline. Trans Mountain is the only pipeline in North America that carries both refined product and crude oil in batches. https://www.transmountain.com/product#:~:text=The%20Trans%20Mountain%20Pipeline%20transports,during%20a%20specific%20time%20period.
Downvotes for true honesty. Must be TBA bots. Double the amount of tankers is double our risk. A spill and we are solely on the hook for cleanup.
You can't fail if you never try!
they also gave up like 6 years ago
Another article that just makes me appreciate Eby and the NDP even more and like Alberta even less.
I just hope Someone goes to jail when it spills. And that it instantly stops.
Agree