Economic Benefits of Trans Mountain Pipeline Expansion in Alberta

This essay provides a detailed economic analysis of the Trans Mountain Pipeline in Alberta. It begins with an introduction to the role of fossil fuels in national development and the context of the pipeline's construction. The paper argues in favor of the pipeline's expansion, outlining six key economic arguments: ownership and benefits, investment opportunities, increased tax revenue, community benefits, and national income growth. Counter-arguments regarding environmental impacts are also addressed. The essay supports its arguments with evidence and analysis, drawing on historical context and economic principles. It highlights the pipeline's potential to boost the Canadian economy, improve living standards, and foster community development. The paper acknowledges the environmental concerns associated with the project while primarily focusing on its economic advantages.

Running head: ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
Economic aspect of Trans Mountain Pipeline in Alberta
Name of the Student
Name of the University
Author Note

1ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
Introduction
The use of the fossil fuels in the form of coal and petroleum has always occupied an
important strategy for the development of any nation state of the world. Since the times of
Industrial Resolution, mankind has discovered the importance of energy and its direct
consequential link to the development of that particular region (Gray, 2019, p 3). With the advent
of globalization, the private players of the society are given the free reign to invest and develop
that sphere of business activity which would prove to be the most profitable to them. The
functioning and the control of the government in the liberal economic market has been reduced
to a considerable extent so as to give the absolute freedom to the private firms to execute their
activities. However, in this context, it is important to understand that certain governments have
retained their control over those services of the nation state which are the most important for the
very survival of the country itself (Brunner & Axsen, 2019, p 8). Thus, the production of fossil
fuels and their usage, is heavily regulated by most governing bodies around the globe. The
purpose of this paper is to understand the Trans Mountain Pipeline in Alberta and the economic
aspect of its construction.
Thesis Statement
The main objective of this paper is to understand the economic aspect of the expansion of
the Trans Mountain Pipeline of Alberta and to argue in favor of its expansion as it leads to the
economic development of the region.
Argument 1
The construction of the Trans Mountain Pipeline in the region of Alberta needs to be first
looked at from the angle of ownership in order to understand to whom the economic benefits

2ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
would accrue to. In the year of 1947, a large deposit of oil was discovered near Leduc of Alberta
(Chan, 2019, p 5). Immediately, the idea for the construction of a pipeline to transfer this oil
from Alberta to British Columbia emerged.
This is due to the reason that during this time, the large developed nations of the world
were exploiting the natural resources in order to support their desire for a higher economic
growth of their respective nation state (Galay & Thille, 2018, p 7). The military of the United
States of America was especially invested in the development of the pipeline infrastructure so
that the crude oil can be easily accessible for the use of the military in the war with Korea. Thus,
to comply with the economic requests of the people, an Act of Parliament was passed in 21952,
creating the Trans Mountain Pipeline Company. The ownership of the profitable company was
divided in to two organizations: the Canadian Bechtel Limited who was in charge of the design,
engineering and construction of the pipeline, and the Standard Oil (Gunton, 2017, p 2). The
pumping of the oil through the use of pipeline was started in 1953, when it was estimated that the
oil cost around ninety three million dollars.
Thus, it can be analyzed that the expansion of the Trans Mountain Pipeline was beneficial
to the government of Alberta since it led to a huge leap in the economic health of the country of
Canada (Pasternak & Schabus, 2019, p 6). During this time, the countries around the world were
already experiencing the benefits of economic development while Canada was still in an under
developed stage with regards to its financial health.
Argument 2
Another argument which has been forwarded in favor of the expansion of the Trans
Mountain Pipeline is that of the benefits the project brings for the people of the region in terms

3ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
of their economic aspects. The first benefit identified in the rise in the investment opportunity in
the country (Zentner & Leach, 2018, p 5).
The expansion of the Trans Mountain Pipeline was not a minor feat. It required the laying
down of huge raw materials in strategic locations so that the crude oil could be seamlessly
transferred from the region of Alberta to that of British Columbia. It was estimated that this
construction led to the injection of nearly thirteen million dollars in the economy of Canada
(Aliakbari & Stedman, 2018, p 8). The business of fossil fuels is considered to be one of the
most profitable business in an economy as it forms to raw material for the generation of
electricity and energy. Thus, foreign investments were at an all-time high as every private player
wanted to be a part of the transportation of fossil fuel.
Thus, it can be analyzed that the expansion of the Trans Mountain Pipeline in Alberta
brought in the foreign capital within the economy of Canada. The private players were highly
motivated by the profit opportunities and this gave a consequential benefit to the government of
Canada to earn as much of investment it could during that period (Cross, 2018, p 4).
Argument 3
A third argument which can be provided in favor of the expansion of the Trans Mountain
Pipeline in Alberta is that it gave an opportunity to the government of the country to earn a
higher tax revenue (Wiebe, 2019, p 581).
For the understanding of this argument, it is first essential to examine the nature of the
pipeline. Although the laying of the pipeline required heavy investment, it is a one time
construction (Made, 2019, p 3). The operational and maintenance charges would definitely be
high but they are not regular in nature. However, the companies using the pipeline for the

4ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
transportation of crude oil and the private players who would be using this crude oil at either of
the ends of the Trans Mountain Pipeline, are required to pay a tax to the government of Canada
every time a transaction occurred. Thus, this would lead to a consequential rise in the amount of
tax which is earned by the government, leading to the development of the economy with the aid
of the tax collected (Watts & Metz, 2019, p 2).
Thus, it can be analyzed that the construction of the Trans Mountain Pipeline in Alberta
has led to a significant improvement of the lives of the people living around the region. Their
standard of living has improved in the sense that their purchasing power has increased (Oliver &
Chassin, 2016, p 5). The private players also have been able to reap the benefits provided by the
government by ensuing that the payment of taxes occur in a transparent and honest manner.
Argument 4
However, an argument which has been advocated against the expansion of the Trans
Mountain Pipeline from the economic angle is the changes in the climate that would be brought
about by its exapnnsion (Zmuda, 2017, p 6).
The contemporary forecasts of work force of Canada has predicted that around five
thousand and five hundred people would be employed in the construction of the pipeline by the
end of 2021. However, in this context it can be seen that the expansionary aims of the Trans
Mountain Pipeline in Alberta would lead to heavy construction activities, whereby a lot of forest
cover, land cover and water resources would be used. All of this would lead to the depletion of
the natural resources in a manner where they cannot be replenished at the same extent. This is
sought to be compensated by providing to them higher economic benefits (Kraushaar-Friesen,

5ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
2019, p 3). Thus, the Trans Mountain Pipeline Company is obligated to prioritize the well-being
of the population of Alberta and the British Columbia for the construction of the pipeline.
Thus, it can be analyzed that the expansion of the Trans Mountain Pipeline in the region
of Alberta would lead to a severe fall in the health of the climate (Boyd & Lorefice, 2019, p 6).
This is mainly due to the economic benefits which is sought to be accrued from the expansion of
the Pipeline. The economic benefits should not be given a priority over the welfare of the society
and of the lives of the people.
Argument 5
The community benefits that would be incurred as a result of expansion of the project of
the Trans Mountain Pipeline can also be judged from an economical perspective. The
development of the community is the main objective of every government of a country. This
development usually takes the firm of the development of infrastructure which requires financial
resources (Fellows et al., 2017, p 10). Many social service benefit schemes are also provided to
the community members for which additional financial resources are required.
In this context, it can be seen that the taxes which are incurred by the government of
Canada with regards to the expansion of the pipeline, from both foreign investments and local
companies, would be used for the development of the community. In other words, infrastructure
would be built in the form of additional roads, railways and air transport. This would give a huge
boost to the trading activities of the country as the goods and the services required for trade, can
easily be transported from one part of the country to the other (Jonasson et al., 2019, p 509).
Furthermore, the community members would also enjoy a relief in their daily activities as they
would be able to avail the transport for their chores.

6ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
Thus, it can be analyzed that the development of the community is, although a tangential
economic aspect of the construction of the Trans Mountain Pipeline, is important for the
development of the society in general. The boost to infrastructure would give a boost to the
seamless execution of the daily activities which make important contributions to the growth of
the nation.
Argument 6
A final argument which is provided in favor of the expansion of the Trans Mountain
Pipeline is that it would lead to a boost in the national income of the country of Canada (Made,
2019, p 5).
To understand this argument, the examination of the concept of national income is
important. A country has a particular income which is accrued as a result of the performance of
various economic activities in the region. Such economic activities generate monetary resources
which accumulated, forms the national income of the country. For Canada, the construction of
the Trans Mountain Pipeline would lead to an addition of nearly forty seven billion dollars in the
economy in the form of taxes and revenue collection (Zmuda, 2017, p 8). This money can be
used by the government for the provision of important health care services to the people in the
form of innovation in the medical field and also, certain social service schemes. Thus, with the
improvement in the quality of lives and the living standard of the people of Canada, they would
be able to work more, contributing more to the growth of the national income of the country.
Thus, it can be analyzed that the expansion of the Trans Mountain Pipeline in Alberta
would contribute directly and indirectly to the earning of higher wages and salaries by the

7ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
citizens of Canada. Their quality of life would be improved and the economic benefits would
transcend in to social benefits for such individuals.
Summary of the arguments
To summarize, it can be seen that the economic benefits of the expansion of the Trans
Mountain Pipeline is enormous. The government of Canada is able to earn a higher income by
the way of taxes and revenue which is collected from the local companies as well as form the
foreign private players. It also leads to a consequential growth in employment opportunities as
the construction would require a humongous labor force. The government of Canada is seen to
ensure that the economic benefits of the project is primarily incurred by the indigenous
population of the country so that they are able to reap the benefits by the way of improving their
living standard (Brunner & Axsen, 2019, p 9). Infrastructure in the country would also be
boosted in the form of expansion of the roadways, railways and air transport. In this context, it is
important to note that with the expansion of infrastructure, there is a consequential rise in the
trading opportunities of the country. Thus, from all angles, the country stands to make an
economic profit from the expansion of the Trans Mountain Pipeline.
Conclusion
Thus, it can be concluded that the economic benefits which is accrued through the
construction of the Trans Mountain Pipeline in Alberta is extremely important for the economy
of the region. It will lead to a rise in the economic growth of the region, which, in turn, would
lead to a consequential rise in the employment opportunities of the region as well. There are a
few scholars who have argued that the expansion of the Trans Mountain Pipeline would cause
several adverse impact on the lives of the people but looking at the expansion from a strictly

8ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
economic perspective, the operational benefits are huge. The usage of fossil fuels by the region
of Alberta itself and its transmission to the British Columbia would lead to the development of
all the regions where the Pipeline would allow the people to extract the crude oil. The growth in
the energy sector would be directly proportional to the use of this Pipeline. The main objective of
the paper was to look in to the issue of how the Trans Mountain Pipeline of Alberta has an
economic benefit in the region. After careful consideration of all the opinions and the view
points which have been forwarded by the relevant scholars of the field, it can be seen that the rise
in employment opportunities is the most single important economic benefit of the expansion of
the Pipeline.

9ECONOMIC ASPECT OF TRANS MOUNTAIN PIPELINE IN ALBERTA
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