Does the Trans-Mountain Pipeline expansion make any sense?

It took 12 years and $34B to build the 1150 km pipeline expansion from the Alberta oil fields to the port of Vancouver. These days, with Mr. Trump back in the white house, Canadians are looking more favourably at pipelines than they once were (source), although having the federal purse picking up the tab, may still be unpopular (source). Lets look into the economics of the trans-mountain pipeline expansion in more detail. The economics make no sense, servicing that massive debt pile slightly outpaces revenues.

Its a bit early to tell, if the trans-mountain pipeline can fund itself. After all, shippers pay trans-mountain some money to transport oil from Alberta to either the Vancouver sea terminal, or refineries in Puget Sound, Washington state. Peering into the latest management report (Q3 of 2024 source), the system transported about 63 M barrels of oil during the 3 month period resulting, earning about 666 M$ in revenue. That’s about 10$ per barrel, a good portion of the $80 CAD one might need to spend to buy that barrel in Alberta (source). Once onboard an oil tanker, one might have to fork over another $2 CAD to ship that barrel to China (source).

So, if anything, there is commercial pressure to reduce the Trans-mountain pipeline transit fees, after all, the last 9000 km, cost only 20% of the first 1000 km.

And that might be a problem, as currently the whole enterprise is financially just treading water. Q3 2024, Debt stood at $26 B, Q2 2024 it was also $26B (source). To be fair, the pipeline only became operational in Q2 2024, and managed about two thirds of its estimated peak daily output in Q3 2024. As with any enterprise of this scale, I suspect capacity is slowly creeping upwards as the operator gains experience. Nevertheless, if we are already at 2/3rds capacity, that wont cut the cost in half say. Further, servicing the debt along with depreciation is about the same as total pipeline revenues (source).

So, we spent $34B and 12 years to build a business that makes no financial sense, and will probably never pay its debts, at least not on its own. That sounds a lot like a subsidy to me. Perhaps all that money could be better spent on developing electric vehicles, its about 10% of the claimed subsidy to the Chinese electric automotive industry, claimed to be about $330 B CAD (source).