Meanwhile, the environmental opposition is such that even Girling’s own mother has called him in recent years to ask “Russ, are you going to blow up the planet?”
Down in Mexico, well, life is much easier.
The regulatory oversight and environmental opposition is a fraction of what it is in Canada and the United States for a company looking to construct new pipelines.
Mexico is proving to be a low-risk, high-reward business venture at a time when the pipeline company is struggling to construct new projects elsewhere in North America and experiencing, in Girling’s words, “a lot of scrapes and bruises” along the way.
Girling painted a picture at the company’s recent annual general meeting in Calgary about how much cheaper and simpler the process of approving a pipeline is in Mexico. In that country, it costs TransCanada about $ 5 million to bid on a project. Compare that to the $ 2.5 billion US the company spent on Keystone XL in the U.S. and the $ 700 million it has already invested in the Energy East project in Canada.
The Keystone XL oil pipeline proposal took seven years before a decision was made. The project is shelved in the U.S. after President Barack Obama denied a permit. Without a permit, the company launched a lawsuit and a multibillion-dollar North American Free Trade Agreement claim to try to recoup its losses.
While the regulatory road is much easier to travel for TransCanada, the reward for each project is not as large, since the projects in Mexico are much smaller than those proposed elsewhere in North America.
Four natural gas projects in the works in Mexico have a value of $ 2.5 billion. Meanwhile, the Energy East oil pipeline in Canada would cost $ 15.7 billion, and a pair of natural gas pipelines in British Columbia to serve new liquefied natural gas export facilities are estimated at $ 9.8 billion.
The payoff will come as the pipelines keep adding up. TransCanada has a total of six projects in Mexico — two operating, three under construction and one under development.
“We foresee there will be more opportunities on the horizon in Mexico,” he said.
TransCanada first entered the country in the mid-1990s, when the company constructed a pair of pipelines.
The Keystone XL project in particular drew criticism, even from celebrities like Robert Redford.
But down in Mexico? The stiff opposition from environmentalists, politicians and regulators just doesn’t exist.
No wonder TransCanada is enjoying its time in the tropics.