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Alberta Trans Mountain pipeline costs rise above recent estimates as construction nears

The Trans Mountain expansion project could resume in September, says the head of the Crown Corporation that now owns the pipeline, but the nearly year-long delay in construction has already sent costs above the most recent estimate of $7.4-billion.

Ian Anderson, CEO of the Trans Mountain Corporation, said oil could be flowing through the pipeline by mid-2022 if permits are granted quickly. He wouldn’t provide an updated figure or explain precisely the reasons behind the increase, citing an uncertain work schedule and regulatory process. Mr. Anderson said the pipeline’s delay, along with greater competition for labour, were adding to costs. “The number will be north of [$7.4-billion],” he said.

Meanwhile, a summer of protests and legal challenges in British Columbia risks derailing work plans. Opponents of the pipeline, including environmentalists and a number of First Nations in B.C., have vowed to block the project through demonstrations, blockades and lawsuits, as the expansion continues to fuel anger against the Trudeau government.

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Trans Mountain will be applying to the National Energy Board within days for a licence to resume work on the project, which was halted last August when the Federal Court of Appeal rescinded regulatory approval. After months of federal consultations with groups and First Nations along the pipeline’s route, Trans Mountain appears ready to start again. The process to get a licence could take a few weeks, Mr. Anderson told reporters.

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“We’re confident now that our project will meet every standard, every regulation, every test and reflect the values and priorities and principles that we all care for as Canadians,” he said.

The federal government bought the pipeline from Kinder Morgan in the summer of 2018 when the American company was ready to give up on the expansion because of ongoing delays created by provincial officials and environmental groups in B.C. The expansion nearly triples the capacity of the 1950s-era pipeline that links Alberta’s oil sands to the Vancouver area and refineries in Washington State.

Ottawa has always said it intends to sell the pipeline, which could include a potential stake for Indigenous buyers. The government has not said how much it intends to sell it for or when.

After the federal cabinet’s approval of the project Tuesday for the second time, Prime Minister Justin Trudeau said the pipeline’s expansion is needed to provide jobs in an Alberta energy sector still suffering from depressed oil prices. The expanded pipeline will also help pay for more renewable energy projects, he said.

The pipeline was central in Question Period on Wednesday where federal Conservative Leader Andrew Scheer criticized Mr. Trudeau for not having the pipeline already built to help Canada’s energy workers.

“All the Prime Minister has done is to buy a pipeline with taxpayers’ money," Mr. Scheer said. "He still does not have a plan to build it. It is a terrible indictment on his record that in Canada, under his prime ministership, that the government must nationalize a project in order to get it built.”

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Alberta Premier Jason Kenney expressed doubt about the Trudeau government’s commitment to the pipeline, saying he would not celebrate Trans Mountain’s approval until oil is flowing through the expansion.

Federal Finance Minister Bill Morneau, speaking in Calgary on Wednesday, acknowledged the “huge amount of anxiety” in the energy industry and told a business audience that the pipeline will be built by Ottawa. Some in the oil patch have been skeptical about whether Mr. Trudeau’s government intends to move ahead with the project.

“What’s happening today is we’re back at work," Mr. Morneau said. "The re-permitting is happening starting today. We are going to get work going this construction season. I want people in Alberta and people across the country to know that intent is real.”

About a third of the pipe for Trans Mountain has already been stockpiled along the project’s route, according to Mr. Anderson. Once approval is received from the NEB, work will start at the export terminal in Burnaby, B.C. he said. Workers will then begin entrenching pipe near Kamloops, as well as between Edmonton and Jasper National Park.

Chief Leah George-Wilson of the Tsleil-Waututh Nation said that she’s prepared to go back to the Federal Court of Appeal to block cabinet’s approval of the expansion. “If that goes ahead, everything needs to stop because we’ll have to go through the Federal Court of Appeal to determine what will happen, just like last time,” she told The Globe and Mail in an interview.

The chief said that she still doesn’t know how the federal government will handle an oil spill near her nation, something that needs to be clear before the project can proceed.

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The Squamish Nation has said it will also file a legal challenge. Vancouver Mayor Kennedy Stewart has said that the city will join any court action. B.C. Premier John Horgan left the door open to the province joining as well, saying that he would join if it was in the best interest of the province.

With reports from The Canadian Press

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