The big problem here is that we’re eventually going to hit global peak oil use. Building out new infrastructure like this takes nearly a decade to complete, and paying it off usually takes multiple decades. If it’s going to take you 20 years at 100% capacity to pay off, and 10 years to build, and we reach peak oil earlier than 30 years from now (the IEA predicts 2030, however other international agencies push that out as far as 2050), then building extra capacity just doesn’t make sense.
If the IEA models are correct, then we wouldn’t even be finished expanding or building any new pipelines before global oil demand starts to drop. That risks a big drop in prices, which makes it more difficult to pay off any new pipelines once they come online as transit fees bottom out. And then taxpayers are stuck holding the bag.
The big problem here is that we’re eventually going to hit global peak oil use. Building out new infrastructure like this takes nearly a decade to complete, and paying it off usually takes multiple decades. If it’s going to take you 20 years at 100% capacity to pay off, and 10 years to build, and we reach peak oil earlier than 30 years from now (the IEA predicts 2030, however other international agencies push that out as far as 2050), then building extra capacity just doesn’t make sense.
If the IEA models are correct, then we wouldn’t even be finished expanding or building any new pipelines before global oil demand starts to drop. That risks a big drop in prices, which makes it more difficult to pay off any new pipelines once they come online as transit fees bottom out. And then taxpayers are stuck holding the bag.