Controversial pipeline project in Canada put on hold

Grant Boone
April 11, 2018

Both Kamloops MLAs are expressing grave concern following Kinder Morgan's announcement Sunday that it is halting all non-essential work and spending on its multi-billion dollar pipeline expansion due to legal challenges put forth by the B.C. government. But it's still unclear who is in charge - Ottawa or the BC government.

This could well be the defining moment for the Trudeau government. She said Notley's plan to give Alberta the ability to restrict B.C.'s oil supply may not be constitutional, but likely can't be challenged unless and until she actually goes through with it.

Notwithstanding the differences between gas and diluted bitumen, the hypocrisy is rank. She took to Twitter to not only lash out at British Columbia, but also vow that her province would push the pipeline, even if it meant taking a public stake in the project.

Peak oil was much talked about in the early 2000s, the idea that after a maximum point of oil extraction had been reached the world's economy would go to hell in a hand basket because there wouldn't be enough oil to do all the stuff we humans want to do with it. But maybe he knows something we don't.

The opening remarks from the 73-year-old billionaire, and the followup with CEO Steve Kean, left little doubt that the company is prepared to write off the more than $1 billion spent to date on the project, rather than risk billions more on an uncertain outcome. About 200 people have been arrested near the Burnaby marine terminal in the last month.

Notley has said the pipeline is critical to helping Canada's economy. "If the rule of law is not upheld and this project is allowed to fail, it will have a chilling effect on investment not just in British Columbia, but across the entire country".

Moreover, Prime Minister Justin Trudeau has staked his own prestige on the project, linking it to the fate of his climate plan and saying again and again that it will be built.

Jennison Associates Llc decreased its stake in Suncor Energy Inc New (SU) by 5.77% based on its latest 2017Q4 regulatory filing with the SEC. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Suncor is one of the 13 shippers. But Natural Resources Minister Jim Carr told BNN the federal government has been involved in the process every step of the way.

But they are now under pressure to put their words into action.

With files from CBC and the Canadian Press.

Notley's tactic, however, seems geared towards making the Alberta government a partner in the pipeline project. Such an arrangement might see the government providing loan guarantees or actual equity stakes in the pipeline.

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"They're being creative. They're trying to figure out any way they can stop it", said James Coleman, an energy law professor at Southern Methodist University, who previously worked at the University of Calgary.

The Trans Mountain project would expand export markets for Canadian oil resources and create thousands of jobs.

The federal government can intervene and assert its authority.

"It is not up to the premier of B.C.to interfere in a project in the national interest", he said.

NDP Leader Jagmeet Singh said if the Trudeau government had properly fulfilled its promise to provide an improved, fully independent environmental review of the project, they may have been able to get the social licence for the project.

But legal niceties and politics are two different beasts, and it is unlikely that any kind of legal progress could be made on Kinder Morgan's timeline.

But ministers are hightailing it back to Ottawa to try and salvage the pipeline project they green-lighted 17 months ago.

"The Trans Mountain Expansion is in the national interest and if it fails to move forward, it will send a strong negative signal to investors at home and overseas that we, as a country, are not open for business", said Perrin Beatty, President and CEO of the Canadian Chamber of Commerce.

"The implications here are seismic", said BC Chamber of Commerce president Val Litwin.

The project - considered crucial for an oil industry hit by transportation bottlenecks - is fiercely opposed by British Columbia's left-leaning New Democratic government, many municipalities, some aboriginal groups, and environmental activists concerned about possible oil spills.

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