Trans Mountain court action continues, John Horgan says

May 30, 2018, 05:36
Trans Mountain court action continues, John Horgan says

The Government of Canada has reached an agreement with Kinder Morgan to buy the Trans Mountain Expansion Project and related pipeline and terminal assets for US$3.5 billion (C$4.5 billion), as the federal government stepped in to save the project after British Columbia's fierce opposition to the project was threatening to derail it.

While the Canadian government says it does not plan to be the long-term owner of the pipeline, its decision to purchase the project on Tuesday is part of an effort to ensure the massive pipeline expansion proceeds this summer as planned.

Prime Minister Trudeau has said the Trans Mountain expansion is vitally important for Canada, a project of strategic interest and a major job creator.

"B.C.is doing all the right things" said May.

Canada is buying a pipeline expansion project rather than risk it being derailed by protests and delays.

"Why are we investing in a pipeline when global demand for heavy oil will be diminishing?" asks Allan. "Every year they have to spend more on maintenance to keep it running", added Allan.

"This is a great day for Canada, for our customers, for our employees", Kinder Morgan Canada CEO Steve Kean said on a morning conference call.

If the federal government took just $9 billion from its proposed $20-billion bailout for Kinder Morgan, it could fund three partial upgraders in Alberta capable of upgrading 300,000 barrels of bitumen a day.

In response, Notley temporarily banned B.C. wine, then hit the road to build public support for the pipeline.

BC Liberal party leader Andrew Wilkinson didn't mince words in a statement blaming the purchase on Premier John Horgan's continued opposition to the project.

The Alberta government will provide funding for any unexpected costs that arise during construction.

Kinder Morgan had set a Thursday deadline to gain certainty over the project or abandon it altogether.

Under the agreement between the federal government and Kinder Morgan, the company would resume construction on the project, which was put on hold in April.

The federal government can in theory step in and disallow any provincial laws that British Columbia might use to block the pipeline, but this provision in the Canadian constitution has not been used since the 1940s.

Moe wants to know how the federal government, in partnership with Alberta, owning the project will change the B.C. government's continued opposition to the project. Justin's father, Pierre Trudeau, created Petro-Canada in the 1970s to further domestic energy interests while the Alberta government rescued Syncrude by bringing in other government partners to take ownership stakes.

The Council of Canadians, meanwhile, attacked Ottawa's purchase as a "Big Oil bailout" that would not remove obstacles to the pipeline expansion.

"It's the kind of epic disaster of the last century I couldn't imagine a modern government doing, but that's exactly what we are doing", May said.

Alberta Premier Rachel Notley was much happier about today's announcement, which she showed through a series of tweets throughout the morning.

"We're going to see more of this until we get to a point where we have stable government that recognizes jurisdiction and also that recognizes that projects that have passed through the stages that they need to pass through the stages of approval should be built", he said.

That stands in contrast to forecasts from climate groups, which predict that demand for Canadian oil will diminish in coming years as countries move towards their Paris accord commitments to reduce carbon emissions, and the Trans-Mountain pipeline could prove to be a waste of resources.

While Ottawa's move is notionally positive for Canadian oil producers, the nationalization of key infrastructure is unlikely to boost investment confidence in Canada, noted GMP First Energy analyst Robert Fitzmartyn.

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