Science

Canadian government to buy troubled Trans Mountain pipeline

Canadian government to buy troubled Trans Mountain pipeline

"Today, we've taken action to create & protect jobs in Alberta and BC, and restart construction on the TMX pipeline expansion, a vital project in the national interest", Trudeau said in a tweet.

Instead, an energy company which has followed the rules in good faith, spent almost a billion dollars in development and undergone exhaustive vetting to win regulatory approval has been impeded at every turn by opponents, including the government of British Columbia and the cities of Burnaby and Vancouver with what amount to nuisance court actions, given how Kinder Morgan has so far won 16 of these legal challenges in a row.

"We believe that federal ownership could further galvanize opposition to the project from special interest groups while complicating the federal government's ability to provide protection over project construction in (British Columbia's) Lower Mainland", analysts Justin Bouchard, Kristopher Zack and Chris MacCulloch wrote in the note.

Alberta Premier Rachel Notley says she sees no immediate need to turn off the oil taps to British Columbia now that the federal government is taking over the Trans Mountain pipeline expansion. "Every year they have to spend more on maintenance to keep it running", added Allan.

Canada's government has said it is buying a controversial pipeline expansion project to ensure it gets built in the face of stiff opposition from environmental activists and a regional government.

Morneau, the finance minister, called the deal to buy the pipeline a "a commercial agreement" and insisted that the Canadian government didn't intend to remain owner of the facility.

That terminal is where the diluted bitumen from the pipeline would be loaded onto tankers and shipped out to sea, with the ultimate goal being to sell Canadian oil in Asia. "Nothing's changed with the obstacles or the problems with this project except that we're now not dealing with a Texas corporation".

Kean did not say why he made a decision to sell rather than absorb the risk of further delays. "If the Federal Court Of Appeal rules that the permits were granted illegally, they were granted illegally to Kinder Morgan or the federal government".

Kinder Morgan had set a Thursday deadline to gain certainty over the project or abandon it altogether.




"This deal - and this pipeline - will unlock investment in our oilsands because we're now on the path to getting full value for our energy resources".

The company has spent more than $1-billion, about $3 a share, on the expansion project to date, RBC said.

Kean said the Canadian government would help search for an alternative buyer.

Morneau said in return, the company will move forward with its plan to twin the pipeline this summer, while the sale is finalized, which is expected to happen in August.

Kinder Morgan last month gave Ottawa an ultimatum: Chairman Steve Kean said the company would suspend all work on the expansion project entirely if the legal issues surrounding it can not be resolved by May 31, adding that it would not continue risking shareholder funds on the project unless the clouds over it clear.

"This is a great set of assets that we are now expanding and expect to continue to find opportunities to expand in the future", Kean said. "I mean, it seems like this is a project that the federal government is going to push through at all costs".

Canada approved the project in November 2016, following an expanded environmental review process that included additional consultations with Indigenous communities and assessing the amount of additional emissions likely to result from additional production.

Canada loses $15 billion every year on the sale of oil because the USA remains its only export customer, resulting in a lower price, Trudeau argues.

Bad enough that people like hysterical, anti-pipeline protesters, as Robert Bryce explains in his book Power Hungry, refuse to accept the inescapable reality that, "We use hydrocarbons - coal, oil and natural gas - not because we like them, but because they produce lots of heat energy from small spaces, at prices we can afford in the quantities that we demand".


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