A new cost-benefit analysis of Kinder Morgan's proposed Trans Mountain oil pipeline expansion concludes the project would cost Canadians more than $6.4 billion during its first 30 years of operation.



The Simon Fraser University study — commissioned by the Living Oceans Society for a National Energy Board-led review — is the latest report by opponents of the project to argue shortcomings of the pipeline that would carry bitumen from the Alberta oilsands to Burnaby for export to Asia or the U.S.



The latest study, whose lead author is SFU resource and environmental planning professor Tom Gunton, an adviser to former NDP premier Glen Clark in the late '90s, found benefits were outweighed by costs attributed to the unnecessary investment in new pipeline capacity and environmental effects.



It's a stark contrast to Kinder Morgan's assessment of the project, which argues enormous economic benefits from the project, and for which it says environmental risks, particularly from oil tankers, will be mitigated by increased tug escorts in inland waters and beefed-up spill response capacity.



For example, Kinder Morgan says the $5.4-billion Trans Mountain project, which will triple capacity of its existing pipeline by twinning the pipeline to reach markets in Asia and the U.S., will provide $45 billion in increased revenues to producers over 20 years and $14.7 billion in additional revenue for government.



It is only one of several major oil pipeline projects facing stiff resistance from environmental groups and some communities and First Nations. The others include Enbridge's Northern Gateway to the B.C. northwest coast and TransCanada's Keystone XL to the U.S. and its Energy East project to Eastern Canada.



In particular, the SFU study found that the cost of unnecessary investment in pipeline projects could exceed $15 billion - and produce a cost of $3.1 billion.



The study points out that approved and proposed pipeline projects will create more than 1.8 million barrels per day of empty pipeline space by 2020.



The study says the problem is that if new pipelines are built they will take oil away from existing pipelines that will then have empty space. Ultimately, the cost of this empty space will get pushed back to oil producers and to the Canadian taxpayer in the form of reduced royalties and taxes.



The study also estimates environmental costs of more than $3 billion - for the risk of pipeline spills and for the cost of the general risk to the state of the environment. Greenhouse gas emissions would cost an additional $290 million.



The SFU study is meant to provide an analysis of the full cost to society, said Living Oceans executive director Karen Wristen. "We commissioned it to try to displace the assumption any large project is always a benefit: it creates jobs and development ... therefore it's good," said Wristen.



The study concludes there may be a need for some new pipeline projects in the future. But Wristen said Canada needs to develop a comprehensive oil transportation strategy that evaluates all proposed projects to determine which project or mix of projects is best for Canada.



Interveners have until September to complete their arguments, for which Kinder Morgan has the opportunity to respond. The NEB panel is expected to make a decision by January.



The NEB often approves projects with conditions. It did so with Enbridge's Northern Gateway pipeline, although the project has not proceeded yet.



The Living Oceans study comes on the heels of two other reports.



A City of Vancouver-commissioned report released last week concluded a major spill from the Trans Mountain pipeline expansion project would expose up to one million Metro Vancouver residents to unsafe levels of toxic vapours and cause up to $3 billion in damage to Vancouver's international brand, now considered to be worth upwards of $31 billion.



At the same time, the Tseil-Waututh released a report that concluded Kinder Morgan has underestimated the environmental and public health risks of oil spills in Burrard Inlet.

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