Canada's Pipeline Paradox: A Conditional Bet or Commercial Certainty?

A new oil pipeline project from Bruderheim, Alberta to Roberts Bank, south of Vancouver has been announced by Prime Minister Mark Carney and Alberta Premier Danielle Smith. The $35.2 to $43.7 billion project aims to transport one million barrels per day using the existing Trans Mountain corridor.

Bryan Gould, a conventional oil company executive in Calgary, analyzed the project's value and found it to be a 'conditional bet' rather than a commercial certainty. Gould argues that the proponents are selling the project as a guaranteed success when, in reality, its viability depends on several factors.

The pipeline's cost is a major concern, with a six-fold increase from $5.4 billion at filing to $34.2 billion at completion. The construction process was also marred by delays and flooding in British Columbia, adding to the expense.

Gould argues that the project's proponents have been overly optimistic about its benefits, particularly regarding the narrowing of the WCS-WTI differential. He claims that even if the pipeline were fully utilized, it would not be able to create a lasting $3-per-barrel boost for all Canadian oil.