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Providing coverage of Alaska and northern Canada's oil and gas industry
April 2019

Vol. 24, No.17 Week of April 28, 2019

Canadian government sets another deadline for Trans Mountain verdict

Gary Park

for Peteroleum News

These days about the only aspect of Canada’s Trans Mountain pipeline expansion that is certain is the uncertainty of government deadlines to reapprove or reject the project.

Thus, it was no surprise when, on April 18, the government of Prime Minister Justin Trudeau again stalled its final decision on tripling capacity of the pipeline it owns.

The National Energy Board announced on Feb. 22 that it still believed raising capacity on the line to 890,000 barrels per day of oil sands bitumen from the current 300,000 bpd was in the public interest, subject to meeting 156 conditions and 16 new non-binding recommendations.

That decision included another 90 days for the federal cabinet to issue a final verdict, setting a deadline of May 22.

With the clock running down and various cabinet ministers dithering over when the government would conclude its consultations with affected indigenous communities, as well as finish its environmental assessment, the government announced a further delay until June 18.

Threat from First Nations

Natural Resources Minister Amarjeet Sohi sent a letter to First Nations along the pipeline route telling them of the revised target date, which he said was needed to wrap up the indigenous consultations.

Some First Nations promptly threatened to take any reapproval back to court, insisting the government was negotiating in bad faith because of its major financial stake in the project, including a C$4.5 billion purchase last year of the existing Trans Mountain system.

Pro-pipeline pressure

The pressure on Trudeau is just as intense from pro-pipeline advocates and the Alberta government, with industry executives telling a Bank of Nova Scotia conference earlier in April that lack of access to international markets for oil sands crude has become a crippling issue for the industry.

But a conciliatory tone was set by incoming Alberta Premier Jason Kenney, who, after a post-election discussion with Trudeau, said he “agreed with the prime minister that (the government) needs to make sure they cross every T and dot every I when it comes to discharging the duty to consult.”

“We certainly don’t want them having to go back to the drawing board for a third time. We will continue on our part to build an alliance across the country that supports TMX (Trans Mountain expansion) and other pipelines.”

On that score, Kenney was rebuffed in his first attempt at a fresh start for Enbridge’s Northern Gateway pipeline to deliver 525,000 bpd to the Prince Rupert port in British Columbia’s coast and TransCanada’s 1.1 million bpd Energy East line to the Atlantic coast.

In his first contact with B.C. Premier John Horgan and Quebec Premier Francois Legault, Kenney’s overture to make a case for pipelines crossing those provinces was flatly rejected, with Legault insisting Energy East has no “social acceptability” in Quebec, though the province might be open to increased natural gas shipments from Western Canada.

Currently, Quebec’s imports of crude oil are valued at about C$11 billion a year, with 37% coming from the United States, 19% from Algeria and other countries in Africa and the Middle East, and 44% from Alberta.

- GARY PARK






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