Regulatory Authorities Impede Trans Mountain Proposal, Curb Higher Shipping Fees

Canada’s energy regulator has denied Trans Mountain’s request to expedite a nearly threefold increase in shipping fees for energy companies. Trans Mountain had sought approval for toll rates that rose from $4 a barrel in 2013 to nearly $11 per barrel currently, as the project’s costs have skyrocketed to $30.9 billion. The regulator concluded that the application required a more thorough review and investigation of the proposed tolls. Trans Mountain expects that the decision will not further delay the pipeline’s anticipated start date in early 2022. The rejection adds to the uncertainties surrounding the project, which already faces opposition from environmentalists, Indigenous communities, and analysts who argue that the cost overruns are excessive. If the toll hike is denied, Trans Mountain’s ability to repay its debt will be significantly hampered. Additionally, taxpayers may be left to cover at least 52% of the pipeline’s cost overrun, furthering their liability.


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