The Canadian government has started financial discussions with Kinder Morgan that Prime Minister Justin Trudeau said will “remove the uncertainty” and ensure that the Trans Mountain pipeline expansion is built.
Alberta Premier Rachel Notley said her government will participate in the talks in New York, Houston and Calgary that “will eliminate the risk” facing Kinder Morgan shareholders.
Neither leader would say how much money they would be willing to invest in Trans Mountain or whether that would take the form of an equity stake or loan guarantees.
Kinder Morgan said it would not issue “updates or further disclosures” during the negotiations.
Alberta turned up the heat on British Columbia April 16 by introducing legislation giving its energy minister the power to restrict the flow of oil, natural gas and refined petroleum products crossing its borders if Kinder Morgan walks away from the Trans Mountain project, or B.C. takes new “hostile action” against the pipeline.
Energy Minister Marg McQuaid-Boyd would be able to direct pipeline companies, railroads and truckers on how much product could be shipped and when.
That could cut off 80,000 barrels per day of refined fuels, or about 30 percent of B.C.’s consumption. Violators would face daily fines of C$1 million for individuals and C$10 million for companies.
B.C. Attorney-General David Eby directed his staff to prepare a legal challenge on constitutional grounds, triggering a scornful response from Alberta, which said it could counter-sue against B.C.’s attempt to restrict the flow of diluted bitumen on Trans Mountain.
These actions followed a hastily called summit on April 15, when Trudeau diverted his travel plans to fly directly from the Summit of the Americas to conferences in Paris and London.
May 31 deadline
Under rapidly mounting pressure from Kinder Morgan, which has set May 31 for an agreement with the governments that would allow construction to start this summer on the C$7.4 billion, 590,000 barrels per day pipeline, Trudeau stopped in Ottawa April 15 for his first meeting with Notley and B.C. Premier John Horgan on the stalled project.
Andrew Scheer, leader of the federal Conservative Party, which has edged ahead of Trudeau in polling ahead of the 2019 national election, issued a blunt assessment of Trudeau’s role in the Trans Mountain dispute, asking why it had taken eight months to meet with the two provincial leaders.
He said Canadians can no longer “trust (Trudeau) to get a major resource project completed,” noting that since getting elected in 2015, the Liberals have watched C$80 billion in energy investment evaporate, led by the Pacific NorthWest LNG project, Enbridge’s Northern Gateway pipeline and TransCanada’s Energy East.
B.C. perspective
Although refusing to soften his hard line on Trans Mountain, Horgan significantly shifted ground on two fronts, notably his insistence during the spring 2017 election campaign that the New Democratic Party would “use every tool in our tool box” to fight the venture.
Rather that referring to the pipeline itself, he now says the key objective of the B.C. government (propped up by three Green Party legislators) is to protect the Pacific coastline from any tanker spills - a stance that has prompted the Trudeau government to promise C$1.5 billion in spending on emergency response systems.
Horgan also conceded for the first time that his government will abide by any court decisions that “run counter to our position” on the pipeline. “That’s the way it should be,” he said.
Verdict expected
Seven First Nations are expecting a verdict in the next few weeks on their claim that National Energy Board and Canadian government approvals of the Trans Mountain expansion failed to properly consult with B.C. indigenous communities.
Even though the Union of B.C. Indian Chiefs are leading public protests against Kinder Morgan, resulting in more than 200 arrests so far, 43 First Nations (10 of them in Alberta) have signed mutual benefit agreements estimated to be worth about C$300 million.
Ernie Crey, chief of the Cheam Nation just east of Vancouver, said cancellation of the pipeline would carry a ruinous loss of job training, employment and business opportunities for aboriginal people.
He also accused environmental protesters of “red-washing” their fight against the pipeline.
“We have a vigorous environmental movement in B.C. and they have learned they can use aboriginal communities to advance their agenda,” Crey said.
