Warkentin reacts to Kinder Morgan

Cristina Cross
June 2, 2018

The Kinder Morgan Canada Limited board announced that the Government of Canada has agreed to purchase the Trans Mountain Pipeline system and the expansion project (TMEP) for United States dollars 3.5 billion, and to work with the board to seek a third party buyer for the Trans Mountain Pipeline system and TMEP through July 22, 2018.

Even if the federal government said it would do everything within its power to see Energy East built, there is no guarantee the project's original backers would still be interested.

Kinder Morgan Inc. created its Canadian subsidiary in a $1.7-billion initial public offering a year ago.

Economist Robyn Allen, who has investigated the Kinder Morgan pipeline, suggests that costs could surge to more than $15 billion for taxpayers. The outcome we have reached represents the best opportunity to complete TMEP and thereby realize the great national economic benefits promised by that project.

Opponents to the Kinder Morgan project cite a 700 per cent increase in oil tanker traffic along the B.C. coast as one of the major red flags.

Under the terms of the agreement announced this week, the Canadian government will fund the resumption of planning and construction on the expansion through a separate federal recourse credit facility until the deal closes, expected late in the third quarter or early in the fourth quarter of 2018.

The company halted all non-essential spending on the pipeline expansion in April pending reassurances from Ottawa that the project would come to fruition. Until then, the pipeline expansion will proceed under the ownership of a Crown corporation.

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Morneau stressed the government's decision to assume financial responsibility for the pipeline expansion project was not made lightly, and they don't plan to be involved for long.

"So I am blowing the whistle on this awful investment and on Prime Minister Justin Trudeau for brokering this bad deal".

The injunction expansion comes as an analyst says market trends are showing just how badly Canada needs the pipeline built. They are led by British Columbia, which is trying to stop the pipeline development in the courts on environmental grounds.

In response, Trudeau reminded the House that the NDP had "celebrated" Alberta Premier Rachel Notley's plan to both protect the environment and grow the economy. The City has 30 days to appeal the ruling.

British Columbia Premier John Horgan said his government will continue its case before the B.C. Court of Appeal to determine if it can restrict heavy oil shipments and impose new oil spill and clean-up rules.

"Is federal government involvement an elegant way to maybe sell some interest to an Indigenous consortium or the Alberta government?" he asked. "And maybe more importantly, you could have had the federal government get a Supreme Court of Canada reference first to assert federal jurisdiction", he said. "This kind of project belongs in the private sector, and it should never have left it".

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