Gas pipeline operators face mounting pressure to transparently disclose the true costs of new projects, as rising construction expenses and falling utilization rates threaten to increase customer costs by 30%–140%. With $723 billion in global projects in development, overruns—such as the Trans Mountain expansion rising from CAD 5.4 billion to CAD 34.2 billion—underscore the need for accountability regarding economic viability and environmental impacts. International Institute for Sustainable Development .
Gas pipeline operators face mounting pressure to transparently disclose the true costs of new projects, as rising construction expenses and falling utilization rates threaten to increase customer costs by 30%–140%. With $723 billion in global projects in development, overruns—such as the Trans Mountain expansion rising from CAD 5.4 billion to CAD 34.2 billion—underscore the need for accountability regarding economic viability and environmental impacts.
International Institute for Sustainable Development .
Key Concerns in Gas Pipeline Expansion:
Soaring Construction Costs: -
Pipelines built before 2024 averaged $5.75M per mile, but costs are rising, with recent projects in the U.S. Northeast reaching upwards of $13 M per mile.
Economic Viability & Stranded Assets:-
As energy markets shift, investing in long-lived fossil fuel infrastructure poses a risk of creating stranded assets—capital-intensive projects that become obsolete.
Regional Expansion Challenges: +
While Asia, particularly India, is driving expansion to boost domestic piped natural gas, these projects face scrutiny over cost volatility and long-term sustainability.
Financial Risk: -
Projects are seeing significant cost overruns, exemplified by Canada’s Trans Mountain project, which saw costs increase more than sixfold.
Environmental and Social Impact: ,-
Beyond financial costs, projects often cause significant ecological disruptions and face legal challenges, which can further impact the final cost.
Industry Spotlight: -
While some companies, like Australia's APA Group, argue for expanding local gas networks, analysts warn that declining utilization means fewer units of gas will need to cover the high fixed costs of these new pipelines. International Institute for Sustainable Development +7
Is a New Oil Pipeline in Canada’s National Interest? | International Institute for Sustainable Development
Research has documented that the new pipeline would increase greenhouse gas emissions, even if the proposed project is accompanied by carbon capture.
MJF Lion ER YK Sharma
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