A Trans Mountain pipeline company report reveals new details about what triggered massive cost overruns within its expansion project, including problems it says were caused by an abandoned landfill site.
Submitted to the Canadian Energy Regulator, the 47-page report states that construction crews encountered an “extreme risk” in the form of “a previously unidentified landfill” located along the pipeline route between Burnaby and Coquitlam, B.C.
Trans Mountain, a federal Crown corporation, declined to discuss the issue but told its regulator that this risk triggered unexpected, lengthy delays and extra costs.
Global News has confirmed that pipeline diggers hit buried car parts, a washing machine and other objects in one old Coquitlam city landfill located on the pipeline route, though it’s unclear if it is the same place described by Trans Mountain.
The company would not confirm the location nor how much it cost to fix the problem.
The 47-page report’s reference to landfill woes was one example of unforeseen problems Trans Mountain says its contractor crews faced on a wider scale along the project’s path.
Its price tag has surged from a $5.3-billion estimate in 2017 to $30.9 billion this year.
According to the document, Trans Mountain officials used incomplete information to develop its pipeline route and initial cost estimates. Also, when crews started the building, they discovered discrepancies between the information they were given and the actual conditions at work sites, which the company calls “ground truthing.”
“Assumptions in the baseline (cost) estimate concerning items such as construction quantities, terrains, alignments, site conditions and geotechnical data were based on available desktop data only,” the company told its federal regulator.
“In many cases, actual site conditions ultimately differed from this desktop data, requiring changes to the expansion project scope and execution plans.”
Industry sources consulted by Global News said unidentified landfills represent serious dangers to pipeline construction crews, exposing them to toxic chemicals and gases like methane that could explode with sparks.
Decaying and buried garbage excavated by construction crews might be considered hazardous materials.
In that case, the waste may need transportation to another site, a costly proposition in B.C.’s Lower Mainland that could easily add tens of millions of dollars to the project’s bills, the sources said.
The new Trans Mountain report is the first document that’s addressed the billions of dollars in cost overruns since March when the Crown corporation issued a press release that blamed global inflationary pressures, supply chain challenges and costs of building in densely populated Lower Mainland B.C.
The project aims to twin more than 1,180 kilometres of the existing pipeline between Edmonton and Burnaby while building new pumping stations and coastal oil storage tanks along the way.
The federal government, which bought the pipeline in 2018, aims to more than double its capacity to increase shipments from 390,000 barrels a day now to 890,000 barrels daily when it opens.
The more significant volumes would allow Canada to boost direct exports to Asia from a Burnaby marine tanker terminal and reduce reliance on the U.S. Midwest oil pipeline network.
The government contends the project will also help Canadian producers fetch higher prices for their oil through direct overseas sales while generating billions of dollars in new tax revenues and thousands of jobs and boosting national economic growth for decades to come.
In contrast, critics say the pipeline expansion is costing too much and will fuel climate change at a time when Canada is trying to cut carbon emissions.
The new Trans Mountain report includes many of the prior explanations the Crown corporation has offered for ballooning costs, including multiple work stoppages, legal challenges, provincial regulatory and municipal permitting delays, flooding, wildfires and COVID-19, plus rising construction resource costs and soaring land values those rose by 350 per cent in British Columbia.
It also blamed the growing costs on the price of reaching hundreds of accommodation and compensation deals with Indigenous groups, landowners and communities affected by pipeline construction, saying such deals cost significantly more money than it first estimated in 2017.
But a fleeting reference to the Trans Mountain pipeline’s “previously unidentified landfill” woes stood out because it offered so few details and alluded to risk.
Company officials reported that crews came across an “extreme risk” from “a previously unidentified, extensive abandoned landfill site” located along the spread of pipeline expansion route known as 7B, covering territory in Port Coquitlam and Burnaby, B.C.
The abandoned grounds “required prolonged and extensive mitigation,” Trans Mountain added.
Tom Gunton, a professor and director of the Resource and Environmental Planning Program at Simon Fraser University, said he found it hard to believe that construction crews would encounter an abandoned, previously unidentified extensive landfill while building a pipeline.
“Maybe they didn’t know initially, but in later design and definition phases, they would drill holes on the route before construction to know what’s down there,” Gunton said.
Trans Mountain declined to give the “previously unidentified” landfill’s exact location, when crews encountered it, what mitigation occurred or its cost.
Neal Wells, a spokesman for a contractor on the 7B spread, Ledcor, also would not answer questions.
There are at least three former landfills in Coquitlam along the pipeline route.
The city’s manager of design and construction, Mark Zaborniak, said he’s not sure which one Trans Mountain is referring to. He added that city inspectors monitoring Trans Mountain construction learned that crews hit several buried items at the city’s large former landfill site between 2021 and 2023.
He said drilling and boring machines hit buried discarded auto parts, a washing machine and large wooden piles.
In another incident, challenges digging down through the old landfill’s “cap” — thick sand and rock layers spread and flattened over garbage — triggered six-week delays, Zaborniak’s inspector reported.
Zaborniak, an engineer, said he could not speak about what Trans Mountain knew about the former Coquitlam landfill and its conditions before construction began. The closed facility’s existence was well-known to city construction inspectors. City desktop data available to all contractors also identified the property as a former landfill site.
A Trans Mountain report produced in 2018 — a year before construction began — confirmed the company knew that routing the pipeline through parts of the old Coquitlam landfill presented “significant risks.” Crews might hit buried and unseen objects during excavations, the document warned.
The old Coquitlam landfill also features special equipment and pipes that capture, manage and allow for the release of methane gas produced by rotting garbage. A local gas company buys it.
None of this should have surprised construction crews, Zaborniak added.
Trans Mountain now admits initial plans and construction estimates for the expanded pipeline, completed in 2017, were not based on details from full land surveys or property visits, just that desktop data, and it won’t say where it got that from.
Company officials had yet to negotiate landowner right-of-way deals or obtain consent to visit many properties.
The limited information Trans Mountain gathered and used to produce plans and cost estimates would later haunt construction crews. They often discovered terrain far different than expected.
Trans Mountain coined a term for the daily reality checks workers faced: “Ground truthing.”
The Crown corporation submitted its latest report to justify to the Canadian Energy Regulator that it needs to increase the tolls it charges oil company customers to recoup part of its costs.
Oil companies, however, oppose the proposed increases, complaining to regulators that Trans Mountain incurred billions in extra costs without showing they “were reasonable or necessary.”
Trans Mountain insists the company did its best under tough conditions, adding that nobody should be surprised the project will cost more than initially forecast.
“The possibility of cost overruns was well known to all potentially affected stakeholders” and was “expressly contemplated to everyone involved in the project from the start,” Trans Mountain’s report to regulators alleges.
andrew.mcintosh@corusent.com