Canada’s new Pacific Link Pipeline

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1:02Trans Mountain pipeline route. And here's what the Prime Minister says will happen next. Over the next year, the major projects office supported by Canada's energy regulator will lead consultations with all stakeholders to set the conditions for the projects, specifics about the ownership, the benefits, the environmental protections, and the local hiring contracting and oversight. CBC's business reporter Kyle Bax is in Calgary. Good morning. Good morning, Rebecca. So it's clear the federal government is all in, Alberta's all in. Does that mean this thing is going ahead? Well, I would describe it as one step forward on a long journey ahead, because there's a lot more work to do and some significant hurdles to overcome, but at least for now, we have a name, Pacific Link, so at least we know what to call it. Okay, you were in Fort McMurray this week and spoke to some people there. Let's have a listen to a few of them. I don't think everybody is crazy is the 2006 Booms were four hours to drive the site because traffic was so bad, but I do see smaller Booms happening

2:02and steadier Booms happening, which is good. I can see the community looking a lot busier. I can see more development, more families moving into the area, better opportunities for improved infrastructure and services and just general growth. So a long road ahead, but if this goes ahead, what does this project mean for Fort McMurray? Well, it means a lot. The last 10, 12 years have been pretty tough there. The oil prices crashed. There were wildfires. There was a devastating flood to the downtown. So people describe how it's been really sluggish. It's been a lot of doom and gloom. But even just over the last year, there's been a real upswing. High oil prices are partly responsible, but a lot of it is also anticipation of this new pipeline and then what it can mean for construction of new projects potentially in the oil sense. And so this community that is known for these meteoric oil Booms and crippling busts over the past number of decades, it's now eyeing another potential wave of good fortune.

3:03Yeah, and so clearly there's excitement there, but there is a pretty hefty price tag to all of this. It's estimated at between 35 and 45 billion dollars. Who's gonna pay for that? Well, the ownership is split three ways right now. So there is a private company, Pemina Pipelines, that has a 10% stake. The remaining 90% is split between the Alberta governments and the federal governments. The federal share is through a crown corporation. And so those are the, that's how the ownership is split right now. But of course, things could change over the next year or two as this project does move towards construction and indigenous groups are being offered ownership, at least a 10% share. So that's something also we're gonna keep an eye on. Interesting you talk about that, the ownership because the union of BC Indian Chiefs has already come out promising a fight against this pipeline. How able do you think the governments are Alberta and the federal government in getting these First Nations communities on side?

4:05Yeah, and there are in some indigenous groups who definitely oppose this project. There are also some that support it and would like a larger ownership stake of this project. And then there's also a number of indigenous groups that are also somewhere in the middle. They are grappling with what to do. So for instance, there's the Athabasca Chippewan First Nation, it's near Fort McMurray. It has concerns about the possible impacts on land, rivers, habitat, it's also listening though to what possible economic benefits there might be. And the Chief, Alan Adam, he's opposed the oil industry many times before. But he also didn't attend the announcement with the Prime Minister yesterday. So the nation is saying it wants to be involved. It wants to be at the table to learn more about the project and then also provide its input as well. You know, the Trans Mountain pipeline was expanded not that long ago. And now we're talking about this new pipeline that will follow the same route likely as what we're learning as the Trans Mountain pipeline. I know we have the oil,

5:06but do we have the means to get it into these pipelines? You know, one of the big challenges is going to be whether the oil companies are gonna sign long-term contracts committing themselves to actually using this project. And the reason is because it is a big pipeline. And so they're gonna have to spend billions of dollars to increase their own production, to commit to using this pipeline for 20, 25, 30 years. And that is gonna be a big hurdle for this pipeline. And that's even why Alberta's premier, Daniel Smith, is expected to roll out a new incentive program coming up to help encourage these companies to spend the money. And this incentive program is only gonna be for companies that are building new projects to increase oil production. The Prime Minister was in BC earlier this week announcing $1.2 billion in federal funding for ocean protections.

6:07How is this project landing in BC? It's gonna be something to watch during the election. The BC conservatives, they came out yesterday right away praising the project. For the incumbent NDP, at this point, the route is generally acceptable because it does follow that existing Trans Mountain pipeline route. The NDP was much more concerned about other routes that Alberta was considering that would have used ports further north up the coast. Right. And so Mark Carney said, there's expectations that construction could begin as early as next September. I mean, given all of what we just talked about, is that realistic, do you think? The people I've spoken with say, yeah, that's pretty optimistic. But when they say construction starting, that could also mean start moving ground, but not actually fully ramping up production. That still could be a couple years away. And there is this long to do list.

7:09There's detailed route planning, there's engineering, there's consultation with more than 100 communities. So there's a lot of work to do. And even with the consultation process, they're trying to do it differently with this project. Previously, a company would announce a project, and then they would go and do consultation with local communities, including indigenous groups. For this one, they're trying, they tried to go out early before announcing where the pipeline would even go. But then a lot of communities were frustrated because they, you know, they basically said, you're providing us with no details. So what are what kind of input are we supposed to give? And so there has been some frustration already, but there's still gonna be a lot of consultation ahead for this project. Yeah, it's shorter time frame, but still a long road ahead. It sounds like Kyle, thank you very much for this. Thank you. Kyle backs as a CBC Business Reporter, and he was in Calgary. For more CBC podcasts, go to cbc.ca slash podcasts.