Ottawa's planned purchase of pipeline elicits shock, disappointment

Marcus Newton
May 30, 2018

In fact, will it even be possible, given this precedent, to build any future inter-provincial pipelines in Canada without federal ownership, as opposed to the United States, where Barack Obama boasted during his presidency that his administration had approved enough pipelines to more than encircle the earth?

It is a study of contrasts to look at Prime Minister Justin Trudeau in 2016, when he said it wasn't government's role to be a "cheerleader" for particular projects, versus Tuesday as he championed the $4.5-billion purchase of Kinder Morgan's Trans Mountain Pipeline.

Finance Minister Bill Morneau said purchasing the pipeline was the only way to ensure that a planned expansion could proceed.

"I'm concerned that there could be catastrophic consequences of a diluted bitumen spell, regardless of the owner of the pipeline", Horgan said in a press conference Tuesday morning.

"I feel betrayed", one woman said, adding that she wasn't sure how it was anyone in Ottawa's business what happens in B.C. on our coastline.

For its part, the Trudeau government greenlighted Trans Mountain in November 2016 and has long insisted the project is in the national interest because Canada loses $15 billion every year as a result of now limited access to export markets outside the U.S. Ottawa will buy the pipeline and all of Kinder Morgan's core assets for $4.5-billion, including pumping stations and rights of way along the route between Edmonton and Vancouver, as well as the marine terminal in Burnaby, British Columbia.

Amid the feud, the pipeline has become a barometer for foreign investments in Canada, with some warning of a spillover into other sectors of the economy.

"We invested in Hibernia, for example", he said.

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.

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"We've always reckoned that the Trans Mountain expansion was logical in terms of, if you build the pipeline, the volumes will flow through it".

Environmentalists jumped on the Trudeau bandwagon because the Liberal Leader had promised to respect Indigenous rights, fight climate change and end fossil-fuel subsidies.

The government is taking control of both the 715-mile pipeline and its expansion that is meant to increase capacity to 890,000 barrels a day.

Many indigenous people see the new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the US.

The company was on pace to grow its earnings at a rate of five per cent with the Trans Mountain expansion project, but would only grow at a rate of two per cent to three per cent without the project, Rowland had said in an interview last week.

Canada is buying a pipeline expansion project rather than risk it being derailed by protests and delays. "There's still 10,000 people who will get arrested if need be". "The only (way) in our estimation that that can be done is through exerting our jurisdiction by purchasing the project".

There has been intense opposition towards the project from environmental groups and some Indigenous communities in B.C.

Morneau says it is not the Government of Canada's intent to be a long-term owner of the pipeline and it will work with investors to transfer the project and related assets to a new owner to ensure the project operates in the public's interest.

Alberta has agreed to put up to $2 billion on the table to cover off any unexpected costs during the sale or construction phases, and will receive equity or profit for any money it does put in.

Other reports by MaliBehiribAe

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