Environmental and financial woes continue for another Canadian mega-project as TC Energy announces construction costs have ballooned to $14.5 billion for its natural gas pipeline in B.C.
The 670-kilometre Coastal GasLink pipeline originally had an estimated $6.6-billion price tag. The project — which has faced staunch opposition from Wet’suwet’en hereditary leadership and received three environmental fines to date — will transport natural gas from northeastern B.C. to the country’s first liquefied natural gas (LNG) processing and export facility in Kitimat, B.C.
Recently, the company has been accused of failing to control erosion and sediment in the salmon-bearing Clore River, or Lho Kwa. Complaints from about three weeks ago were investigated by the BC Oil and Gas Commission.
“Based on the imagery and information we've seen, [we] did not find any non-compliances,” the commission said in an email statement to Canada’s National Observer on Jan. 13, several days after the complaint was made.
On Jan. 31, a news release from the David Suzuki Foundation raised the alarm about construction in the Clore River yet again. This time, Wet’suwet’en officials who visited the site by helicopter described washouts that sent debris and sediment floating downstream.
“We are asking for a stop-work order until we, the hereditary chiefs, can meet with B.C. and federal regulators to ensure there are people and plans in place to uphold the law,” said Tsebesa, a Likhts’amisyu clan chief and hereditary chief for the territory.
“To do anything else, would be negligent.”
Tsebesa saw the construction at Clore River from the helicopter on Jan. 10 and Jan. 29, despite a lifelong fear of helicopters. Clore crossing is part of Likhts’amisyu territory, and as a hereditary chief, Tsebesa’s job is to watch over it, often with her young grandson in tow.
Coastal GasLink’s latest cost increase is nothing new when it comes to large Canadian energy projects. The Trans Mountain pipeline expansion project’s cost now sits at $21.4 billion, which is about four times more than the original estimate.
Despite the cost increase, TC Energy says it is still aiming to complete construction by the end of 2023 but notes up to $1.2 billion more could be tacked onto the bill if construction drags into 2024.
Cost overruns are creating financial challenges for LNG projects in Western Canada and have put Canadian LNG projects at a competitive disadvantage, according to a new analysis from the Institute for Energy Economics and Financial Analysis (IEEFA). The analysis was released Feb. 1, the same day TC Energy announced Coastal GasLink’s further cost increase, so it draws from the previous cost estimate of $11.2 billion.
These rising costs will likely lead to higher tariffs to transport natural gas from northeast B.C. to the coast, and could cause gas producers to sell their product to the U.S. instead, it says.
The Woodfibre LNG project in Squamish, B.C., has similarly seen construction cost estimates rise from $2.8 billion in 2015 to $6.6 billion at present, according to the IEEFA report. Another factor is uncertainty about gas well permitting and production, it says.