Canada’s prime minister Justin Trudeau has once again approved a hotly contested proposal to expand the crude oil pipeline it bought last year, providing hope for a depressed energy industry but angering environmental and Indigenous groups which have fiercely opposed the project.
Construction on the expansion of the Trans Mountain pipeline is planned to start this year, Trudeau told a news conference on Tuesday. A senior government official, speaking on condition of anonymity, said earlier that Ottawa expected legal challenges to the approval.
The project would triple Trans Mountain’s capacity to carry 890,000 barrels a day from Alberta’s oil sands to British Columbia’s Pacific Coast, alleviate congestion on existing pipelines and diversify exports away from the US.
Trudeau, who faces a close election scheduled for October, has been under pressure from both western Canadian politicians who accuse him of doing too little for the struggling oil industry, and from environmental groups that fear spills.
“This isn’t an either/or proposition. It is in Canada’s national interest to protect our environment and invest in tomorrow, while making sure people can feed their families today,” he said, adding he knew some people would be disappointed.
The approval was widely expected as the government spent C$4.5 billion ($3.4bn) to buy the 66-year-old pipeline from Kinder Morgan Canada Ltd last year to ensure that the expansion proceeded. Western Canada’s oil production has expanded faster than pipeline capacity, causing a glut of crude to build up and pressure on Canadian prices.
The pipeline would allow Canada to vastly increase exports to Asia, where it could command a higher price. Canada has the world’s third largest oil reserves, but 99% of its exports now go to refiners in the US, where limits on pipeline and refinery capacity mean Canadian oil sells at a discount.
“It’s really simple. Right now, we basically have one customer for our energy resources, the United States. As we’ve seen over the past few years anything can happen with our neighbors to the south,” Trudeau said.
Trudeau said every dollar Canada earns from the project will be invested in clean energy. The court said the government needed to be better, Trudeau noted. “And you know what?” he said. “They were right.”
The government’s latest approval can be appealed. Trans Mountain also requires various permits and route approvals in British Columbia, where that province’s left-leaning New Democratic Party government opposes the project.
The BC government also plans to appeal a recent British Columbia appeal court ruling that the provincial government cannot restrict the flow of oil on pipelines that cross provincial boundaries.
Many indigenous people see the 620 miles (1,000km) of new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the US. Environmentalists say it also raises broader concerns by enabling increased development of the carbon-heavy oil sands.
Mike Hurley, mayor of Burnaby, where the pipeline terminates in a tank farm near the Westridge Marine Terminal on Burrard Inlet, said his city was “absolutely against” the pipeline expansion.
“It brings too much extra risk into our community and we don’t believe the risk is worth the rewards. There’s risk of fire, explosion, chemical releases, a natural disaster for our First Nations people who use the inlet so much, and for business. We have been kept in the dark.”
Construction is expected to take two and a half years.