Alberta Government's WCOP Submission Sparks Concerns Over Taxpayer Support

The Alberta government's submission on the proposed West Coast Oil Pipeline (WCOP) application is now due, and experts are warning that the project may require significant taxpayer support to move forward. Lennie Kaplan, a former senior manager in the Fiscal and Economic Policy Division of Alberta's Ministry of Treasury Board and Finance, has expressed concerns about the high level of risk involved in building a new pipeline.

Kaplan believes that a comprehensive business case and risk assessment are essential for evaluating both the benefits and costs of proceeding with the WCOP. He has compiled a checklist of critical items that should be included in the Alberta government's submission to the Major Projects Office (MPO), including identification of private sector companies willing to finance the project, as well as potential mechanisms for de-risking.

The pipeline development process must be driven by the private sector and based on solid business case, according to Kaplan. He notes that pipelines have high capital expenditures requirements, risks of capital cost overruns, and long construction timelines, which can make them challenging to finance. The project would require a massive wave of new private sector investment to meet the expanded level of oil production, estimated at $150 billion over the next decade.