Tag Archives: Kinder Morgan Inc

Rachel Notley, Justin Trudeau, John Horgan Bill Morneau and Andrew Weaver.

We bought a pipeline! How the key players are impacted by the federal government’s purchase of the Trans Mountain Pipeline

We own a pipeline!

Well, not yet.

Federal Finance Minister Bill Morneau announced yesterday that the federal government plans to purchase the existing Trans Mountain Pipeline from Kinder Morgan Inc. by August 2018 if another investor cannot be found. The federal government has committed to help the Texas-based corporation find a new owner for the pipeline by August 2018, or else Ottawa will “purchase the company’s Trans Mountain Expansion Project and related pipeline and terminal assets for $4.5 billion.”

In the meantime, the federal government will loan funds to Kinder Morgan Inc. in order to start construction on the pipeline this summer. If the federal government does purchase the pipeline, which seems likely, then a Crown Corporation will be created to complete the estimate $9 billion expansion of the currently existing pipeline.

Morneau declared the federal government would be eager to sell the pipeline back to a private company once it is built, but if the project is truly in the national interest – and going to be built with public dollars – then maybe it should remain an asset of the federal government and the people of Canada.

Here is a look at how yesterday’s pipeline announcement impacts some of the key players in this seemingly never ending political dispute:

Justin Trudeau: The Prime Minister of Canada silenced conservative opponents from claiming he was secretly plotting the pipeline’s demise and mutes his social democratic opponents who say he was just kowtowing to a Texas-based oil company. While the project will move forward with the powers of the federal government behind it, it is unclear if this will help Trudeau’s Liberals electorally in Alberta (where his Liberal Party holds three seats) or in British Columbia (where his party holds 19 seats).

Rachel Notley: This is a big win for the Premier of Alberta. Notley has been the strongest public advocate for the pipeline expansion and has poured almost all of her political capital into the success of this project. She has taken a firm line with pipeline opponents, most notably the Government of British Columbia, by threatening to slow or halt the transport of oil and gas from Alberta into BC.

Kinder Morgan Inc: If all goes according to plan, Texas-based Kinder Morgan Inc. will walk away with a big $4.5 billion payment from the Government of Canada, all because our system of democracy and federalism inconvenienced its shareholders.

John Horgan: The Premier of British Columbia says he will continue to use the tools available to him to oppose the pipeline expansion, including its current legal challenges. The entry of the federal government as the owner of the pipeline introduces a new dynamic between the governments in Victoria and Ottawa. As many premiers have discovered, running for re-election with Ottawa as your main opponent can be a recipe for success.

Andrew Weaver: The leader of the BC Green Party holds the balance of power in his province as long as his 3-MLA caucus continues to support Horgan’s NDP government in Victoria. The Green leader described the federal government’s intervention as “a betrayal by a government who ran on a hopeful vision for a better future.” The Greens will expect Horgan to continue their fight against the pipeline and likely will not consider ending their agreement with the NDP until sometime after the upcoming Proportional Representation referendum.

Jason Kenney: The leader of the Official Opposition in Alberta supported Notley’s pitch last month for the Alberta government to invest in the pipeline, so he has once again been relegated to the sidelines on the pipeline issue.

Andrew Scheer: The leader of the Official Opposition in Ottawa attacks the Trudeau Liberals for driving away private sector investment and claimed Trudeau forced through expansion of the Trans Mountain pipeline by nationalizing the project. To better understand the track record of government involvement in the energy industry, Scheer would benefit from taking a crash-course in Canada’s energy history. I recommend he start his education by reading Larry Pratt’s The Tar Sands: Syncrude and the Politics of Oil, which is an essential text on the history of Alberta’s oil sands.

Will the pipeline actually get built? Maybe. 

Ownership of the pipeline will change and the federal government does have powers, both political and legal, that a private corporation does not, the opposition to the pipeline has not magically evaporated overnight. Public opinion remains mixed in British Columbia and the opposition to the pipeline expansion is firm. There will continue to be protests against the pipeline and demonstrations of civil disobedience can be expected.

There are also a number of court challenges underway, including the BC government reference case and challenges from First Nations communities to the Federal Court of Appeal.

There is also a federal election scheduled to take place in October 2019 and a provincial election expected to be called in Alberta in spring 2019.

While Morneau was clear he wants construction on the Trans Mountain Pipeline expansion to begin immediately, a number of legal and political challenges still stand in the way of the project’s completion.

(photography by Chris Schwarz/Government of Alberta)

Kinder Morgan drops a Sunday afternoon bombshell in the never-ending Trans Mountain Pipeline dispute

“Alberta is prepared to do whatever it takes to get this pipeline built” – Rachel Notley

It was a busy Sunday afternoon in Alberta politics.

We appear to have reached another stage in what feels like a never-ending political dispute over the expansion of Kinder Morgan’s Trans Mountain Pipeline from Edmonton to Burnaby. Late on Sunday afternoon, Kinder Morgan released a statement declaring that it was “suspending all non-essential activities and related spending on the Trans Mountain Expansion Project.”

The company plans to “consult with various stakeholders in an effort to reach agreements” by May 31, 2018.

It feels like a big win for British Columbia Premier John Horgan and opponents of Kinder Morgan’s Trans Mountain Pipeline expansion. But this announcement by Kinder Morgan could also be part of a strategy to increase the pressure on Prime Minister Justin Trudeau to convince Horgan to back down from his opposition to the pipeline.

Kinder Morgan Inc. is the key player in this dispute but has remained largely silent in the public debate. But when the Texas-based company finally spoke this afternoon, all the political players jumped to attention.

Notley responded to Kinder Morgan’s announcement with a message that is pitch perfect for Alberta-ears. Notley called on Trudeau to stand up for Alberta’s interests as he has for economic interests in Ontario and Quebec. And in a move that will remind Albertans of Peter Lougheed, Notley went as far to say that “Alberta is prepared to be an investor in the pipeline” if opposition to the pipeline caused private investors to flee.

Trudeau responded very clearly with a tweet declaring that “The Trans Mountain expansion will be built.” And federal Natural Resources Minister Jim Carr reinforced support for the pipeline in a written statement.

All that said, it remains unclear what the federal government will do to stop what is mostly verbal threats by the BC government to stop the pipeline.

In a statement released today, Horgan stated that “the federal process failed to consider B.C.’s interests and the risk to our province” – a sentiment that most Albertans might agree with on many other issues. But with the BC NDP government now trying to jump-start the west coast liquid natural gas industry, it seems clear that neither climate change or the transportation of natural resources are the actual reasons for opposing this pipeline.

Creating political obstacles that could convince Kinder Morgan to lose interest in the project is part of Horgan’s strategy, and maybe one of the final tools in the now infamous ‘toolbox’ referred to in the 2017 Confidence and Supply Agreement between the BC Green Caucus and the BC NDP Caucus.

The Notley government is expected to introduce legislation giving the government the authority to limit oil and gas shipments to BC, a move that could have serious political and economic repercussions for Alberta, BC and Canada. I would imagine this drastic move by the Alberta government would provide some incentive for Trudeau to figure out how he might provide an opportunity for Horgan to gracefully save face on this issue.

I expect this might not be the last time this never-ending political dispute makes big news on a Sunday afternoon.