Dawn Farrell might be Canada’s most elusive chief executive and had intended to keep it that way. In the 13 months she has headed Trans Mountain Corp., she hasn’t granted a single interview until this week.
She said she wanted to focus on the heavy lifting of her primary job: getting the $30-billion twinning of the 70-year-old oil pipeline to the West Coast done.
When Ms. Farrell accepted the job in August, 2022 – after retiring as chief executive of TransAlta Corp. TA-T 17 months prior – she wanted to give back to Canada in the form of completing the challenging project.
“This project is controversial. It’s going to cost a lot more than people thought it would,” Ms. Farrell said in an interview with The Globe and Mail in Calgary on Thursday.
“Some people don’t even want it. They want oil to go away altogether.”
But even if there is a wide divide between those who believe the project is a nation-building exercise and those who see it as an expensive relic of a fading fossil-fuel era, the new pipeline expansion is now months away from being operational.
In the 1,150-kilometre span between Edmonton and Burnaby, B.C., there’s just 16 kilometres of pipe to be put in the ground. The expansion will boost the pipeline’s capacity to 890,000 barrels per day from the current 300,000, and the new part of Canada’s only oil pipeline system to the West Coast will be transporting heavy crude by March.
With a conclusion so close at hand, Ms. Farrell said she has decided to talk to media, in part because she’s annoyed.
“I am really, really irritated by the way in which people are putting down this project when there are 15,000 people out there on those spreads, busting their butts making this work, doing some of the most incredible construction.”
She added that 10 per cent of the work force is Indigenous. There is a plan to offset greenhouse-gas emissions from the project itself. And she believes Canada’s big oil sands companies in their stated goal of reaching net-zero emissions by 2050.
“It’ll be the No. 1 oil pipeline in the world from an ESG perspective.”
If it sounds like Ms. Farrell is fully immersed in the project, she is. In the course of the interview, she sketches out the process of boring through mountains and talks about the painstaking construction methods used. She notes that the project has found 80,000 artifacts and “we are the largest archeological dig in the history of Canada.”
She said she didn’t take the job because she needs the money.
The former electricity executive had to be persuaded to come out of retirement back in 2022, and this came in part at the urging of Deputy Prime Minister Chrystia Freeland. The two women had become acquainted several years ago, during the whirlwind talks on the United States-Mexico-Canada Agreement.
Ms. Farrell calls Ms. Freeland both a remarkable person and “the boss.” Trans Mountain is a Crown corporation – purchased by the federal government in 2018 to keep the expansion project from collapsing under the weight of environmental opposition, interprovincial battling and regulatory delays. Ms. Freeland, in her role as Finance Minister, is the final word when it comes to all things Trans Mountain.
The role of owner is a difficult one for a federal Liberal government that lists climate action as one of its top policy goals, but is faced with the reality that oil was Canada’s top exported product for most of the past 15 years – surpassing even passenger cars and light trucks.
“She might have pressured me a bit,” the 63-year-old Ms. Farrell said of Ms. Freeland.
Ms. Farrell said the final decision on her hiring was made by Trans Mountain’s board of directors. This came down to her corporate experience but also because she – in her own words – speaks truth to power and isn’t “political.” She said she has the trust of both the Liberal federal government, which owns the pipeline and has financed the expansion project, and United Conservative Party-led Alberta, the province that will benefit the most.
Politics aside, there’s also the delays and expense. Ms. Farrell said the project is on track with its most recently provided target – that the pipeline will begin operating some time in the first quarter of 2024. But in 2017, the cost was pegged at $7.4-billion. By earlier this year, that cost had escalated to at least $30.9-billion.
Even before the latest increase was announced, Parliamentary Budget Officer Yves Giroux said Ottawa’s purchase of the Trans Mountain pipeline and expansion project is no longer projected to be profitable because of the construction delays and higher costs.
However, Ms. Farrell says the pipeline expansion will open up new trade routes, increase the value of Canadian oil, increase royalties for the Alberta government and tax revenues for the federal government. “That economic value supports our Canadian dollar. It makes us a stronger country.”
Ms. Farrell also argues that all big infrastructure projects, including hydro and nuclear, have cost overruns, but are still badly needed. And in an era of higher interest rates – the project has billions of dollars in debt financing – every day counts. The tab will be $200-million for every month the project is delayed, she said.
“It’s carrying costs,” Ms. Farrell said. “It’s really now a matter of which day do we stop accumulating interest during construction, and start charging for the new pipeline.”
The project faced what might be some of the last routing resistance from a First Nation near Kamloops that was concerned about construction methods on sacred ground. But last month, the Canada Energy Regulator sided with Trans Mountain on this routing issue.
In Alberta just a few years ago, there was skepticism that the pipeline would ever be built. Now, it’s a question of how much the project will cost shippers, and where the oil will go – U.S. West Coast markets or actually to Asia. Ms. Farrell won’t speculate on what volumes of oil might make it across the Pacific. “I gotta get it finished.”
As to who will buy the company, former Trans Mountain chief executive Ian Anderson – who steered the project for 17 years before retiring in 2022 – has said that some form of Indigenous ownership is necessary, and the pipeline expansion is an opportunity “to transact some economic reconciliation.”
This year, federal officials – led by Ms. Freeland – have been meeting with Indigenous communities who have an eye on acquiring an interest in the pipeline. Ottawa has said it is prepared to provide financial backing to First Nations and Métis communities to help them acquire ownership stakes in the pipeline.
Ms. Farrell said she is focused on building the expansion, and selling Trans Mountain is the federal government’s job.
But she gave a hint of what she would like to see. “My ideal structure would be some First Nations ownership, some financial players and potentially a new public company,” she said.
“That’s kind of Dawn Farrell’s pipe dream.”