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

Vol. 23, No.20 Week of May 20, 2018

Pipeline factions dig in

Canadian government likely to boost powers to advance Trans Mountain project

Gary Park

Petroleum News

Warring factions are fast becoming more entrenched as the battle over the Trans Mountain pipeline project approaches a May 31 drop-deadline date set by Kinder Morgan.

Other than Kinder Morgan, which says the protests present an “unquantifiable risk” to the project, the most key player is the Canadian government, whose Natural Resources Minister Jim Carr has promised early federal legislation that is designed to crush the British Columbia government’s court case to control the flow of crude oil through the province.

“We think that federal jurisdiction is clear; we’re looking at legislation to see how we can enhance that,” Carr said.

He would not comment on the exact nature of the legislation, but Bruce Ryder, a law professor at Toronto’s York University, said the government can use legislation to signal that it will not allow provinces or municipalities to frustrate the pipeline construction.

Although Kinder Morgan has yet to disclose exactly what will happen if the government fails to take action allowing work on the pipeline to proceed unhindered, the general consensus is that the company will not let the issue drag into the summer construction season.

Professional protesters

The most significant development is the emergence of professional protesters, who are setting up a permanent camp on public land near the Burnaby tanker terminal in the port of Greater Vancouver.

Vancouver Mayor Gregor Robertson, who will not seek re-election in October, told Bloomberg News that he doubts “resistance on the West Coast is going to fade. I think it will only intensify. Escalation looks likely.”

But the more resistance to the C$7.4 billion project builds, with television crews facing threats of violence, the more the public mood shifts to Kinder Morgan’s side. The latest surveys show 54 percent of British Columbians support the pipeline, reflecting steady growth from 40 percent over the past seven months.

Gary Mason, a columnist in The Globe and Mail, said the ranks of protesters are no longer made up of retired professors, nurses and “ordinary folk.”

Instead, he wrote, the main purpose of the activists “is to cause trouble and bully and intimidate people,” while refusing to hear pro-pipeline arguments.

Prosecution issues

Now that the protests have taken a nasty turn, Mason said B.C. Premier John Horgan and Robertson need to start demonstrating some leadership, given that a B.C. Supreme Court judge has suggested Kinder Morgan should not have to carry the burden of prosecuting the more than 170 people who have been arrested for violating a civil injunction obtained by the company.

He said anyone thwarting the injunction, including politicians who have knowingly violated the law, should be tried for criminal, not the much softer civil contempt charges.

Countering that viewpoint, Burnaby city manager Lambert Chu told the Vancouver Sun that protest camp facilities are allowed to occupy land under a B.C. Supreme Court order that supersedes a city bylaw prohibiting the use of a public right of way.

The Royal Canadian Mounted Police are taking a low-key approach so far, acting on a case-by-case basis that has included arrests of four individuals for incidents deemed to be unrelated to pipeline protests.

Meantime, many First Nations have declared projects such as the Trans Mountain expansion on their traditional territories must obtain their consent to get built.

But the law in Canada does not insist on projects gaining First Nations consent, even as governments in Canada, including British Columbia, adopt a United Nations Declaration on the Rights of Indigenous Peoples that calls for free and informed consent before approval of any project affecting aboriginal territories or resources.


That claim was bolstered in the first week of May when institutional investors obtained more than 50 percent of shareholder votes for two resolutions at Kinder Morgan’s annual general meeting pressuring the company to publish an annual sustainability report that better reflects issues which pose a risk to business.

Proponents of the investor activism declared the vote was a victory for “democratization” inside a company.

One resolution, tabled by New York state’s US$270 billion pension fund, was a “resounding victory for shareholders and others concerned about the company’s lack of reporting on environmental, social and corporate governance issues,” said fund trustee Thomas DiNapoli, who urged Kinder Morgan to be more “accountable (about) risks in its operations” including the Trans Mountain expansion.

A second motion from a Boston investment firm asked how the company was preparing for a rise in global warming resulting from fossil fuel development while it advances projects that face strong community and First Nations opposition.

A spokesperson for Kinder Morgan confirmed the two resolutions obtained the required majority vote but remain non-binding.

Peter Chapman, of the Vancouver-based Shareholder Association for Research and Education, said such resolutions rarely attract more than a fraction of shareholder support in the range of 10 to 20 percent, serving as a “wake up call” to management and demonstrating a growing democratization movement.

He said more than 1,000 shareholder proposals are filed in the U.S. every year, but only about 500 or 600 make it to the ballot.

However, the level of support generally for these proposals is growing across North America, as indicated by two similar resolutions at Kinder Morgan’s annual meeting last year which attracted 34.1 percent of shareholder support.

Alberta annoyed

What annoys pipeline supporters such as the Alberta government is the continued outside interference, led by people such as former U.S. Vice President Al Gore, who issued a tweet earlier in May declaring his support for Horgan, Robertson and all Canadians opposed to expanding Trans Mountain to 890,000 barrels per day from 300,000 bpd.

“The Kinder Morgan pipeline carrying dirty tar sands oil would be a step backward in our efforts to solve the climate crisis,” he wrote, along with the #stopKM hashtag.

Alberta Premier Rachel Notley told a public gathering that Gore’s comments “clearly demonstrate a lack of understanding about the overall issue and all the facts. I just think it’s starting to fall on a larger and larger number of deaf ears.”

“We’re also seeing ... previously less vocal people come forward” to express the importance of the pipeline to generating jobs and revenue for health care, education and public services.

Jason Kenney, leader of Alberta’s opposition United Conservative Party called Gore’s remarks “an inconvenient lie from a jet-setting millionaire.”

He said that while the United States and OPEC ship more oil “this hypocrite who owns multiple mansions and flies private jets wants to landlock Canadian oil. Canadians have had enough of (his) campaign of double standards and defamation.”

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