Canada · Vancouver
Regulator Approves Lower Trans Mountain Pipeline Tolls
In brief
The Canada Energy Regulator has approved a toll agreement that lets major oil shippers on the publicly owned Trans Mountain pipeline pay about 10% less per barrel than originally planned, Canada’s National Observer reported.
The agreement was negotiated between Trans Mountain Corporation, the federal Crown corporation that owns the pipeline, and seven of the eight companies that hold most of its shipping rights, including Imperial Oil, ConocoPhillips, Suncor and BP. In return for the lower rate, the shippers agreed to pay for 90% of the pipeline’s capacity whether or not they use it, up from 80% under the earlier arrangement.
According to the National Observer, which reviewed regulatory filings, the discount is worth about $2.5 billion and means the roughly $40 billion of public money spent building the expansion will not be recovered within the 20-year life of the shipping contracts. The regulator dismissed objections from the Tsleil-Waututh Nation, whose lawyer argued the deal amounts to a public subsidy and could encourage cost-cutting that raises spill risks.
Trans Mountain did not respond to the outlet’s questions. Critics are concerned the toll model could be used for the proposed Pacific Link pipeline, which Trans Mountain would partly own.
Why it matters
Canadians own the pipeline, so the toll level decides how much of its construction cost taxpayers eventually get back. The decision may also shape how future pipeline projects are priced.
Sources
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