Providing coverage of Alaska and northern Canada's oil and gas industry
August 2018

Vol. 23, No.32 Week of August 12, 2018

Pipeline factions dig in

Trans Mountain opponents set up protest camp; construction set to start in 2019

Gary Park

for Petroleum News

Work on expansion of Canada’s Trans Mountain oil pipeline is to resume shortly after a four-month lull in construction activities that gave anti-pipeline factions time to establish a protest camp close to Kinder Morgan’s Burnaby shipping terminal in the Port of Vancouver.

At the same time, the company has indicated that the planned in-service date for the new parallel pipeline (increasing Trans Mountain’s capacity from the Alberta oil sands to 890,000 barrels per day from the existing 300,000 bpd) will be delayed by a year from the original targeted startup date to December 2020.

Ian Anderson, president of Kinder Morgan’s Canadian unit, said the company will resume work in August to secure, survey and prepare the right of way and cooperate with First Nations to look for traditional aboriginal artifacts.

He said the timetable now calls for “laying physical pipe in a prepared, surveyed, environmentally-protected right-of-way” early in 2019.

Anderson said his company is “ramping up hard” in anticipation of a transfer of Trans Mountain ownership to the Canadian government later in August.

“The most important thing is to demonstrate to Canadians and to our prospective new owner that this project can be executed in a manner that serves the interests of everybody,” he said.

New regulatory hurdle

Anderson also acknowledged that a new regulatory hurdle has surfaced that could make the change of ownership subject to U.S. approval because the purchase includes a spur line delivering Canadian crude to Puget Sound refineries in Washington state.

If that leads to a U.S. national security review it raises the possibility that President Donald Trump could veto the deal.

Closing the transaction requires clearance from the Committee on Foreign Investments in the United States, CFIUS, an inter-agency committee chaired by Treasury Secretary Steven Mnuchin.

A spokesman for Canadian Finance Minister Bill Morneau said the Canadian government and Kinder Morgan have already made a joint voluntary filing to CFIUS.

Daniel Ujczo, an international trade lawyer, said the CFIUS review “is not a big deal, as long as there is no foreign ownership outside of Canada,” though he said the transaction “could be used as a counterweight” if attempts to renegotiate the North American Free Trade Agreement “start going bad.”

Protest camp

The slowdown in construction work since the Canadian government made its C$4.5 billion offer to buy Trans Mountain has allowed time for protesters to escalate their resistance to the pipeline and tanker traffic in the Port of Vancouver.

A growing shantytown known as Camp Cloud has been set up outside the Kinder Morgan terminal gates in Burnaby, posing a threat to a dense nearby forest and large storage tanks labelled “flammable.”

The City of Burnaby issued a 72-hour eviction notice on July 18, but protesters have ignored the order, while authorities have given no indication what if any action they might take, other than a warning by Burnaby Mayor Derek Corrigan that his administration might seek a court order that the Royal Canadian Mounted Police would “feel comfortable in utilizing.”

In the meantime, tensions reached a breaking point when leaders of a pro-pipeline group alleged they were assaulted by Camp Cloud residents when they attempted to move a bulldozer on to the site to symbolize the importance of construction jobs.

Kwitsel Tatel, identified as the camp matriarch, declared to reporters that “we’re going to stand our ground,” without saying how far that might extend.

The most troubling assessment of the growing confrontation came from David Dodge, a former governor of the Bank of Canada and known widely for his cautious, prudent style. He told a firm of Edmonton lawyers that “some people are going to die in protesting construction of this pipeline. We are going to have some very unpleasant circumstances.”

“Nevertheless, we have to be willing to enforce the law once it’s there. It’s going to take some fortitude to stand up,” he said.

Asked later how he anticipated someone dying, Dodge said that fate would likely befall those who are among the “extremist minority” of anti-pipeline demonstrators.

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