Canada-owned Trans Mountain oil pipeline not worthwhile -budget officer

Home science Environment Canada-owned Trans Mountain oil pipeline not worthwhile -budget officer
Canada-owned Trans Mountain oil pipeline not worthwhile -budget officer
Canada-owned Trans Mountain oil pipeline not worthwhile -budget officer

(Reuters) – Canada’s government-owned Trans Mountain oil pipeline is now not worthwhile after value overruns and delays in its enlargement venture, the Canadian Parliament finances official stated on Wednesday.

A report by PBO Yves Giroux stated the pipeline’s internet current worth is destructive C$600 million (destructive $463.03 million), primarily based on the distinction between Trans Mountain’s money stream and its buy worth of C$4.4 billion.

The report from the PBO, which gives unbiased recommendation to Parliament, is a slap within the face for Prime Minister Justin Trudeau, whose authorities purchased the pipeline in 2018 to make sure enlargement continues regardless of protests. Since then, the enlargement of different pipelines has facilitated the stream of crude oil, one in every of Canada’s most respected exports.

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Trudeau is dealing with criticism that increasing the pipeline goes in opposition to Canada’s targets of lowering greenhouse fuel emissions.

The extra delays and elevated development prices will additional cut back the worth of Trans Mountain, the PBO stated. If Ottawa cancels the enlargement, the federal government will face a write-down of C$14.4 billion, the PBO stated.

A authorities supply stated the cancellation state of affairs is hypothetical, and the federal government has no such plans. The supply added that the PBO’s evaluation of non-profitability doesn’t take into consideration different financial advantages comparable to jobs.

The Trudeau authorities has lengthy stated it can promote the pipeline as soon as the enlargement is almost full.

The pipeline transports as much as 300,000 barrels per day of oil close to Edmonton, Alberta, to the Pacific coast of British Columbia, and the enlargement will practically triple its capability.

Trade and environmental advocates have very completely different views of the pipeline.

Growth is vital to the Canadian oil business, making certain its long-term stability and offering extra diversified entry to markets, stated Reg Koren, product spokesperson for Synovus Vitality (CVE.TO).

Julia Levine, director of the Nationwide Local weather Program at Environmental Protection, an environmental advocacy group, stated the federal government ought to cancel the enlargement and reduce its losses.

“Continuing to pour public dollars into the project will be another broken promise from a government committed to ending fossil fuel subsidies,” she stated.

Trans Mountain stated in February that the price of the Trans Mountain enlargement had jumped to C$21.4 billion from C$12.6 billion, and its launch date was pushed again 9 months to late 2023.

(1 greenback = 1.2958 Canadian {dollars})

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(Reporting: Rod Nickel and Ismail Shakeel). Further reporting by Steve Shearer in Ottawa; Modifying by Chizu Nomiyama, Nick Ziminsky, and Leslie Adler

Our Requirements: Thomson Reuters Belief Rules.

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