Deal by Kinder Morgan Canada to sell Trans Mountain welcomed with misgivings

by Frankie Norman May 30, 2018, 11:17
Deal by Kinder Morgan Canada to sell Trans Mountain welcomed with misgivings

The Federal government has reached an agreement with Kinder Morgan to buy the Trans Mountain pipeline & related infrastructure for $4.5-billion.

Even the Canadian Energy Research Institute recognizes that this new regulation will have a dramatic impact on bitumen by lowering both the demand for and price of Canada's heavy crude oil.

But the pipeline faces legal and regulatory challenges from BC that has delayed construction of the project. The move ended weeks of speculation sparked by Kinder Morgan's threat to abandon a project facing "unquantifiable risk" as the British Columbia government vowed to use every tool to block it.

Monica Gattinger, director of the University of Ottawa's Institute for Science, Society and Policy, said her polling research shows strong national support for federal intervention to support the pipeline.

"We have agreed to a fair price for our shareholders", said Steve Kean, chief executive officer of Kinder Morgan Canada and Kinder Morgan Inc. Ottawa would provide a federal loan guarantee to the company in the meantime.

He says Kinder Morgan will proceed with its plan to twin the pipeline this summer while the sale is completed.

Amid the feuding, the pipeline has become a barometer for foreign investments in Canada, with some warning of a spillover into other sectors of the economy.

Horgan said the federal government's decision was "motivated by a private company, who gave a deadline - not to me, and not to the people of British Columbia - but to someone they characterized as stakeholders".

"And, it will reassure investors that Canada is a country that respects the rule of law and gets big, important things done", he added.

A majority of Canadians support the pipeline, according to recent polls, but they are reluctant to see tax dollars used to support it.

"If you think about the dozens of pipelines that exist for crude oil, natural gas liquids, natural gas itself, petroleum products, all throughout the USA and Canada - and we track this stuff - I'm not aware of a single one that's owned by any government entity. not on this scale". Currently, he said yesterday, Canada is losing US$11.56 billion (C$15 billion) annually because of the pipeline constraint.

Prime Minister Justin Trudeau wanted the Kinder Morgan Trans Mountain pipeline extension built in the worst possible way, and now he's done it.

His Liberals face a hard balancing act in trying to champion climate action while supporting growth in Canada's oil sector.

Alberta Premier Rachel Notley, who's been locked in an escalating battle with Horgan over his opposition and has passed a bill threatening to cut off oil and gas shipments to British Columbia, struck a triumphant tone at a press conference in Edmonton.

Other opposition parties weighed in on the announcement as well. In order to expand deliveries from the tar sands area, there was an attempt to build the Keystone XL pipeline, but the Obama administration killed that by denying a permit for the pipeline to cross the border. Indigenous groups said their concerns are being ignored.

Vancouver Mayor Gregor Robertson called the pipeline an "unacceptable risk" that threatens 10,000 jobs in the harbour.

Clayton Thomas-Muller, a campaigner with 350.org, argued that Trudeau's move demonstrates that he "still hasn't learned two simple lessons: you can't be a climate leader and build massive fossil fuel projects and you can't ignore Indigenous rights and preach reconciliation".

Minister of Natural Resources Jim Carr (left) and Minister of Finance Bill Morneau (right) announced the federal government will purchase the Trans Mountain pipeline.


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