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What ROI are we looking at for the new pipeline? (vargar.org)
submitted 4 months ago by to c/canada@lemmy.ca
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Hey, sorry, I tried looking up a case study of this for myself, but couldn't find anything substantial. Do you guys have anything like this?

I'm wondering about the new pipeline purely from an economic sense.

Essentially stuff like:

  • Projected taxpayer funded dollars to build the entire thing (a projected bell curve of expenditure).
  • Projected oil demand, and price for the time that the pipeline remains operational.
  • Finally, a bell curve of ROI for us.

I know I know, the environmental damage this would do is horrible, blah blah blah. I agree. I just want to know if this is at the very least a good financial decision or not.

Again, I'm looking for actual quantitative projections. Not stuff like, "but Asia is moving toward renewables".

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[–] 8 points 4 months ago* (5 children)

https://energynow.ca/2025/12/trans-mountain-pipeline-delivers-12-6-billion-in-new-revenue-to-oilpatch-windfall-to-governments-report/

Trans mountain made 12.6 billion at a cost of 34 billion. It's believed any new pipeline won't be anywhere near as successful.

Note that 12.6 is estimated oil revenue, not tax revenue.

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  • [–] [S] 3 points 4 months ago (4 children)

    Okay, so according to the trans mountain pipeline corporation, it returned 1.7B to the owner in 2025 and 0.45B in Q1 2026.

    It says that the forecasted dividends for the coming years are higher. I'm not sure how they forecasted this, but whatever.

    They also talk about some "optimization program" to increase throughput volumes by 30%.

    Regardless, let's say the average revenue goes to around 2B per year. In that case, it would require around 20 years to break even (considering the 4.5B + 34B put in by the feds). Everything after that is profit.

    Buuuut yeah, I don't have data on projected oil demand till 2046. And constructing ANOTHER megaproject in addition to this one... Yeeeeah I dunno....

    They like putting up business studies and projected revenues and all that for everything. Why not for the new pipeline? That's just so unprofessional and irresponsible.

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  • [–] 2 points 4 months ago

    That's not even ROI.... because the oil would have been transported using rail or another more expressive transport. So the pipeline only returns the savings from rail transport plus the net profit of the additional oil that couldn't be transported. That would only be a fraction of the net revenue.

    Then you have to consider that the government gets its returns only on tax, which is only on gross profit.... So it's another fraction of that number again.

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  • [–] 0 points 4 months ago (2 children)

    Missing from your calculation is the interest paid on the $30 billion or whatever it cost us. That money was borrowed and we pay interest on it every year. So when calculating the return on investment you have to add all of the interest costs to the cost of the project. Something that the liberals in the media tend to forget conveniently

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  • [–] 1 point 4 months ago (1 child)

    Also missing is the cost of maintenance over that time period. That's a non-zero amount, and increases (or should increase) with the age of the infrastructure.

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  • [–] 1 point 4 months ago

    Well it is possible that the supposed amount of profit is net rather than gross meaning that the costs of operation are taken from it. But you're right that this is not clear

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