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This column is part of a debate in which business writers Andrew Willis and Barrie McKenna make the case for and against Ottawa’s purchase of the Trans Mountain pipeline.

Finance Minister Bill Morneau caught a glimpse of the future this week when Trans Mountain Pipeline protesters briefly disrupted a speech he was giving to a Calgary business crowd.

As the soon-to-be owner of the pipeline, Ottawa is now Enemy No. 1 of all those who are determined to kill the project. Just a few days ago, the villain was Kinder Morgan.

And that is the crux of the federal government’s problem as it prepares to assume sole responsibility for building, bankrolling and defending the controversial $7.4-billion pipeline expansion. The change of ownership does not guarantee success. In some respects, it could make getting the high-risk venture over the finish line much more difficult.

Ottawa will still face non-stop and potentially violent protests, interminable court challenges and a highly uncertain global market for the heavy Alberta crude that would flow through the expanded pipeline from Edmonton to Burnaby, B.C.

Andrew Willis: This Trudeau gets it right − on energy, Trans Mountain and the West

Delays and cost overruns are a virtual certainty, as they are for most energy megaprojects. Just look at B.C.’s Site C and Newfoundland’s Muskrat Falls hydroelectric projects, where costs continue to soar far beyond initial estimates. For Trans Mountain, higher costs could leave taxpayers and oil shippers saddled with unexpected bills, and a pipeline no one wants. The current estimate of $7.4-billion for the project is almost certainly just a starting point.

Holdups and rising costs would, in turn, complicate the government’s stated goal of selling the project back to the private sector within the next couple of years.

“Ottawa is going to get in trouble because there is no commercial exit for their project,” warns Jeff Rubin, an economist and energy expert. “If they want to be a long-term owner of what likely will become a stranded asset, then they have the right plan.”

Mr. Morneau insists there will be “no fiscal hit” from the federal government’s ownership of the pipeline. And Ottawa clearly wants to get out as fast as possible. But will that be in a few months, or years? And when the time comes to sell, will the prospects of finishing the pipeline look any better than they do today?

Critics warn that the economic rationale for Trans Mountain hinges on flawed logic. Mr. Morneau and other federal officials talk about the vital need to secure access to “tidewater” for Canadian crude as a way to escape the chronic discount on heavy oil in the U.S. market.

“The facts don’t support that argument,” insists Robyn Allan, an independent economist and former chief executive of Insurance Corp. of British Columbia. “The economics aren’t there. This project is financially compromised and is not commercially viable.”

There is scant evidence that Asian refineries are ready to pay more for our oil than U.S. buyers. In recent years, heavy crude has consistently sold for significantly less in Asia than in the U.S., where refineries along the Gulf Coast have been re-engineered to accommodate this tough-to-process oil. Refineries in Texas, Louisiana and Mississippi comprise the largest market in the world for heavy crude such as Canadian bitumen.

“The demand for our oil is still in the U.S.,” Ms. Allan says.

This project is financially compromised and is not commercially viable.

Robyn Allan

At the moment, just 1 per cent of the oil that flows through the existing Trans Mountain pipeline is sold in Asia. Most is either refined in British Columbia or sent by rail or sea to refineries in California and Washington State, and that is likely to still be the case when, or if, the expanded pipeline is completed.

Mr. Rubin wonders how it’s in Canada’s national interest to supply cheap bitumen to refineries in Washington state and California that later comes back to Canada as high-priced automotive fuel. “If ever there was a stereotype of Canadians as drawers of water and hewers of wood, it’s the oil sands,” he says.

There is an even-worse-case scenario. Imagine the expansion project eventually dies, leaving Ottawa with a tough-to-sell pipeline and scores of angry shippers. If that happens, the government could have a tough time recouping its original investment. Analysts at Atlanta-based SunTrust Robinson Humphrey estimated that Ottawa paid Kinder Morgan a “very attractive” price for Trans Mountain. Royal Bank of Canada put it more bluntly, saying Kinder Morgan is pocketing a $1.2-billion premium over and above the value of the existing pipeline plus the money it’s already spent on the expansion.

Another danger lurking for Ottawa as it wades into the pipeline business is its promised “indemnification” of any losses as a result of delays and court challenges. Any subsidies Trans Mountain offers shippers would penalize rival pipeline projects, including TransCanada Corp.’s Keystone XL line to the U.S.

The Canadian Energy Pipeline Association, which speaks for companies such as TransCanada and Enbridge, pointedly warned this week that the federal government’s financial intervention could harm “future transmission pipeline projects.” In essence, rivals are warning that subsidizing Trans Mountain will make it less likely that other projects get built.

If critics are right – that project costs will soar and lucrative Asian markets won’t materialize – Ottawa will face a dilemma. It will either have to impose much higher tolls on shippers, or heavily subsidize those rates. Under current long-term contracts reached between Kinder Morgan and Alberta oil producers, including Cenovus, Suncor and Imperial Oil, shippers are on the hook for a big portion of the cost overruns, even if the pipeline is never built.

Ottawa’s response so far is that it’s takeover of the project reduces the chance of delays because it’s pushing ahead with construction.

But those assurances don’t begin to address the potential pitfalls ahead.

The protesters who greeted Mr. Morneau in Calgary this week will be out in force along the route in the months and years ahead. Clashes will inevitably intensify as construction creeps closer to Vancouver and the tanker terminal in Burnaby.

Federal officials might want to ponder what happened outside the remote Standing Rock Indian Reservation in North Dakota in 2016 and 2017. Police and U.S. National Guard troops used tear gas and water cannons to evict thousands of protesters who had set up camp to block completion of the Dakota Access pipeline.

Ottawa will need considerably more resolve as suburban Vancouver becomes the epicentre of the global anti-pipeline movement. The confrontation will make the Dakota Access showdown look like a picnic.