Seventeenth insurer cuts ties with Trans Mountain pipeline

The fact that seventeen insurers have now ruled out Trans Mountain should alarm any financial institution considering investing in this project.

London, UK / Unceded Coast Salish Territories (VANCOUVER, BC) —  Trans Mountain insurer and Lloyd’s of London syndicate Aspen Insurance has pledged to cut ties with the existing Trans Mountain tar sands pipeline when its current insurance policy expires this summer. Aspen joins sixteen insurance companies, including Chubb and Zurich Insurance, that have dropped Trans Mountain or vowed not to insure the Trans Mountain Expansion Project.

In an email to Coal Action Network, a spokesperson for Aspen stated: “As a matter of corporate policy, Aspen does not comment on the specifics of any application for insurance we receive, any insurance or reinsurance contract we underwrite, or any claim we pay, however, we can confirm that we do not plan to renew the Trans Mountain Tar Sands Oil Pipeline project.” 

“Over the last two years insurers at Lloyd’s of London have come under increasing pressure to cut ties with Trans Mountain. It’s brilliant that Aspen is listening, but we really need a step change at Lloyd’s. What we need now is leadership that mandates all insurers in their marketplace to end underwriting of new fossil fuel projects. While Lloyd’s CEO John Neal blocks meaningful climate action, we expect to see ongoing protests on Lloyd’s doorstep,” said Andrew Taylor, organizer with Coal Action Network.  

This latest setback for Trans Mountain follows Minister of Finance Chrystia Freeland’s February announcement that the pipeline would receive no further public funding. On the same day, Trans Mountain admitted that the construction cost of the expansion project had risen to $21.4 billion, an  increase of over 70% in the last two years and a 296% increase since the project was first proposed in 2014.The mechanical completion date for the pipeline was also pushed back from late 2022 to late 2023, so the project is now delayed by four years.  

 “Aspen’s decision to drop Trans Mountain confirms what leading insurers, financial institutions and global institutions like the International Energy Agency already know: we cannot be building more fossil fuel infrastructure in a climate crisis. Fossil Fuel projects without free prior and informed consent are a material risk that cannot be ignored any longer.” said Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative.

Analysis by the Parliamentary Budget Office and Institute for Energy Economics and Financial Analysis (IEEFA) calls into question whether the pipeline is financially viable at this construction price and predicted that taxpayers will have to continue to pour money into the project if it is to be completed. IEEFA found that the government would not be able to generate an adequate profit for investors because the tolls it would charge oil companies to use the pipeline, cannot be raised high enough to support new debt on the pipeline plus operational costs. To do so would raise the cost of exporting oil through the Trans Mountain Expansion to a price that would not be competitive in international oil markets. To compete, the government would have to maintain toll rates so low that it would be operating the Trans Mountain Expansion at a loss for its investors.

“The fact that seventeen insurers have now ruled out Trans Mountain should alarm any financial institution considering investing in this project,” said Sven Biggs, Canadian Oil and Gas Program Director for Stand.earth. “This pipeline is a risk to the climate, a risk for communities it runs through, and too great a risk for investors and insurers.”

On the heels of the IPCC’s latest report where the UN Secretary General called any investment in new fossil fuels infrastructure “moral and economic madness,” if Canada moves forward with projects like Trans Mountain, the country is well on a path of further entrenching its dependence on fossil fuels while accelerating the climate crisis. If Canada’s federal government is truly committed to being a leader on climate change and to getting taxpayers off the hook for future losses, it must follow in Aspen’s footsteps and cancel this project immediately.

###

Media contacts: 

Ziona Eyob, Media Director – Canada, canadamedia@stand.earth, +1 604 757 7279

Charlene Aleck, Tsleil-Waututh Nation Sacred Trust Initiative, +1-604-679-4734