Oil tankers are seen at the Westridge Marine Terminal in Burnaby, B.C. on May 12.Jennifer Gauthier/The Globe and Mail
The head of Trans Mountain Corp. is optimistic that a new pipeline to carry landlocked crude to a Canadian coast – be it North, East or West – can be built within the next decade.
Mark Maki believes Canada can be a major oil and gas exporter in the face of massive trade uncertainties that are roiling global markets, and part of the key to that is to build new infrastructure to reach overseas markets.
“Realistically, it’s not a bad long-term economic call on the part of the country to see enhanced access to tidewater,” he said in an interview Monday. Is that optimism or realism? “In this space, you have to be a bit of an optimist,” he said.
The conversation around new pipelines in Canada has shifted markedly over the past six months. Where Canadians – particularly those in the East – once balked at the notion of more pipelines, the stark reality of U.S. President Donald Trump’s trade war has caused a seismic shift in thinking. A Nanos Research poll in April indicated that nearly three-quarters of Canadians support an East-West pipeline for oil and liquefied natural gas.
For all the talk of new pipelines, however, Mr. Maki says the first step is to optimize Trans Mountain’s existing capacity.
The line saw its highest volumes to date in March, hovering around 790,000 barrels a day. But the system can carry more, he said.
If there is commercial support to boost capacity, then Trans Mountain will move ahead with projects to do so, he said. That would include ramping up power on the line and using additives that would help oil move faster through the pipe.
“We’ve got to do the easy things first,” he said. “Then, in the background, you can look at, ‘Okay, is there support for another pipe somewhere? Is there contractual support for another pipe somewhere?’ Because no one’s going to do it without economic certainty.”
That’s where Trans Mountain comes in. After all, the company was specifically set up to build and run pipelines.
“We can do more of that. So I am hopeful for Canada’s own good that we see more infrastructure development and development of the resource.”
Mr. Maki believes Canada can lead the world in all forms of energy, be it renewables, oil or natural gas. And being a major exporter will be all the more critical as reserves in the Permian basin, which comprises roughly half of U.S. oil production, continue to decline.
When he first moved into the role of CEO, Mr. Maki viewed Trans Mountain as a business that simply needed to be tended to, and the returns harvested. Then came Mr. Trump’s trade war, which he said was “an eye-opener for everybody.”
The bullheaded approach from Washington on tariffs had leaders of both major parties here pitching the importance of Canadian energy sovereignty during the recent federal election.
Liberal Prime Minister Mark Carney has since pledged to “build, baby, build,” and make Canada an “energy superpower” by pushing major projects forward at a pace not seen in generations.
The prospect of a new pipeline system needs to be part of the discussion around energy, Mr. Maki said. He’s hopeful that will be the case, given the recent change in tone from Ottawa under Mr. Carney.
“We have to find a way to get infrastructure done here more effectively,” Mr. Maki said.
“Because if we keep doing it this way, everything is going to be epically expensive. Whether it’s a power line, a gas pipeline, an LNG facility, a critical minerals processing facility – all of it will be incredibly expensive.”
Mr. Maki took the reins of Trans Mountain on Sept. 1, moving into the top spot from his previous role as chief financial and strategy officer. Prior to that, he was with Canada’s largest pipeline operator, Enbridge Inc., for 34 years.
The long-delayed Trans Mountain expansion ended up costing $34-billion. The project was built to open up lucrative overseas markets for Canadian oil and remove a price discount that had existed for years because of overreliance on exports to the United States.
Kinder Morgan Inc., the U.S.-based company that owned the Trans Mountain oil pipeline, proposed the project in 2012, pegging the cost at $5.4-billion. It was acquired by Canada in 2018 after Kinder Morgan, frustrated with delays and deepening regulatory scrutiny, threatened to walk away from the project.
Construction was slowed by the COVID-19 pandemic as well as wildfires and floods, and ended up several years and tens of billions in cost overruns beyond the initial target.
The federal government eventually wants to sell Trans Mountain, but Mr. Maki said now is not the ideal time. There is uncertainty about the outcome of court challenges over the cost of shipping rates, for example, and the corporation is still looking at adjustments to the system to boost volumes.
And while he acknowledged that the pipeline sector continues to face opposition, including environmental groups pressuring banks to avoid insuring the line, he said “the narrative around pipelines has become a lot more constructive since the tariff noise from the U.S.”