Feds look to offload pipeline while resuming construction

by Laura Keil


Kinder Morgan, pipeline map, pipeline expansion
Kinder Morgan’s Trans Mountain Expansion mapped out. / RMG FILE PHOTO

The Government of Canada has agreed to purchase the Trans Mountain Pipeline system and expansion project (TMEP) for $4.5 billion, and to work with Kinder Morgan Canada Limited to seek a third party buyer.

In the meantime, the Government of Canada has agreed to fund pipeline construction work by guaranteeing TMEP’s expenditures, meaning pre-construction pipeline work in the Valemount area could resume this summer.

The project has been stalled since Kinder Morgan put a freeze on spending in light of continued fierce opposition from the BC NDP government and First Nations in the courts.

Federal Finance Minister Bill Morneau said the federal government didn’t want to own the Trans Mountain system long-term and would seek another buyer, but Kinder Morgan CEO Steve Kean said his company will be paid the $4.5 billion even if another buyer isn’t found. The Province of Alberta will also invest up to $2 billion in indemnity, to be converted to equity if necessary.

The $4.5 billion does not include future construction or labour costs.

Critics on both the right and the left have criticized the move, the right saying the government should not be using taxpayer money, with the left saying the project is futile and flies in the face of clean energy goals.

“This really is a sad day for Canada, and Premier Horgan is squarely to blame,” said Chris Gardner, president of B.C.’s Independent Contractors and Businesses Association. “In less than a year on the job, John Horgan has ripped-up the approval of the Trans Mountain project; created a constitutional crisis; started a trade war with B.C.’s closest neighbour; sent a chilling message to investors that Canada does not respect the rule of law; and forced Ottawa to spend billions of taxpayer dollars to build a project that the private sector was more than willing to deliver.”

Meanwhile the Sierra Club criticized Trudeau for the short-sightedness of the move.

“It’s outrageous that Trudeau is using public funds to bail out a multinational corporation when we could create more jobs by investing in building a clean energy economy instead,” the Sierra Club said in a release. “Investors have been shunning Kinder Morgan’s pipedream and Kinder Morgan has successfully blackmailed the federal government into providing an exit strategy.”

“The message from Ottawa is that a tarsands pipeline and tankers are more important than endangered orca whales, the hundred thousand jobs that depend on a healthy coast and our climate commitments.”

The club notes the future of this pipeline and tankers project is not solely up to the federal government: the rights of First Nations have been recognized by the Canadian courts, the Canadian constitution and the United Nations.

“Multiple Indigenous legal challenges are still outstanding and can stop this project.”

Indigenous communities are split on support for the project, with some bands supporting the project and others opposed. Some First Nations have offered to buy a stake in the now-for-sale pipeline project.

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