RISDON: Expansion critics - Ottawa has chosen West Coast over East Coast

3:17pm


Image Credit CFJC Today

The move will see Ottawa purchase the pipeline and the core assets of Kinder Morgan Canada for $4.5 billion dollars.

Yikes. These are the same people who have just agreed to spend $4.5 billion to buy Kinder Morgan's Trans Mountain project - the existing pipeline, the terminal assets, the current management team and workforce and the right to build an expansion that will triple daily capacity to 890,000 barrels.

Kinder Morgan Canada, whose stock trades on the Toronto Stock Exchange under the KML ticker, saw its share price spike to $18 Tuesday morning after being halted ahead of the announcement of Canada's offer to buy the Trans Mountain pipeline and expansion project. The overwhelming majority of Canada's oil exports are sold to American refiners at a discount to worldwide benchmarks, reducing fuel prices for American consumers and income for Canadian producers.

But the finance minister has been pressed on the possibility that future costs could well exceed that number, as the company has previously pegged the total expansion cost at $7.4 billion.

"And, it will reassure investors that Canada is a country that respects the rule of law and gets big, important things done", he added. That would end British Columbia's efforts to regulate the project, argue government officials.

Opponents to the Kinder Morgan project cite a 700 per cent increase in oil tanker traffic along the B.C. coast as one of the major red flags. But British Columbia has refused to yield.

Green Party of Canada Leader Elizabeth May called it a "huge subsidy to fossil fuels" on Twitter.

Canada approved the project in November 2016, following an expanded environmental review process that included additional consultations with Indigenous communities and assessing the amount of additional emissions likely to result from additional production.

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The company has appealed to government and authorities to ensure safety of our employees, facilities, and surrounding communities. The Madras high court on Wednesday, however, ordered a stay on the expansion and directed that a public hearing be held.

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

Regina-Wascana MP and federal Minister of Public Safety Ralph Goodale said the federal government's purchase and construction of the pipeline "will assist the economy of all of Western Canada and indeed all of Canada".

Kinder Morgan has never asked for a dime of taxpayer dollars for this project.

Peter McCartney, with Wilderness Committee, says the move changes the role the federal government now plays in the energy industry.

But the nationalization of a project with massive profit potential is an admission that Canada's regulatory system is badly - if not entirely - broken.

But the new strategy changes little for some of the people most impacted, according to people who live close to the Sumas Mountain tank farm. They are led by British Columbia, which is trying to stop the pipeline development in the courts on environmental grounds.

The Trans Mountain pipeline expansion has become a dinner table debate across the nation this week.

Under the proposed federal plan, the Trans Mountain pipeline will be placed under the stewardship of a new Crown corporation and Ottawa will divest itself of the project at a later date. "We've already heard from a number of global investors that they're quite pleased this project now has certainty that it's moving forward, and I'm confident we're going to see some new investments and dollars flowing into the province".

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