Published: Wed, May 30, 2018
Science | By Joan Schultz

Trudeau government to buy troubled Trans Mountain pipeline for $4.5 billion

Trudeau government to buy troubled Trans Mountain pipeline for $4.5 billion

If no new buyer is reached by July 22, Kinder Morgan will present the $4.5 billion offer from Canada to its shareholders for a vote before the end of July.

The B.C. government is carrying on with its reference case against the Trans Mountain pipeline expansion, Premier John Horgan told Prime Minister Justin Trudeau in an early-morning phone call Tuesday.

The announcement was made by Canada's finance minister, Bill Morneau, who called the proposed purchase "an investment in Canada's future".

The environmentalists and anti-pipeline First Nations (not all of which oppose the project) will blame the greedy, foreign oil barons and their political puppets in Canada.

"I think they needed to leave all the options on the table and, certainly, the private marketplace would have taken effect", she said. Currently, he said yesterday, Canada is losing US$11.56 billion (C$15 billion) annually because of the pipeline constraint.

"The station was quickly isolated and as a precaution, the main Trans Mountain Pipeline was shut down", a statement reads, adding crews started the pipeline just before 3:30 p.m. that day.

Under the agreement between the federal government and Kinder Morgan, the company would resume construction on the project, which was put on hold in April.

"Now we're committed to building the expansion, but they have not announced at all how they are going to finance the expansion", said May.

"We're continuing to work on multiple levels to ensure that projects that are in national interest like the Trans Mountain Pipeline expansion get built", says Trudeau.

A Finance Department official says that as a Crown project in the national interest, Canada has special allowances to proceed that may not be available to a private-sector company.

Kinder Morgan Canada gave Ottawa until May 31 to come up with reassurances it could press ahead with plans to more than double the capacity of the existing pipeline amid efforts by British Columbia to block construction. "I mean, it seems like this is a project that the federal government is going to push through at all costs".

In the wake of the federal government's decision to buy the Trans Mountain pipeline from Kinder Morgan, industry analysts and climate groups agree on at least one thing: The political battle over the expansion of the contentious pipeline is not over.

Morneau said the government's purchase of the project "will ensure that we're able to safely get Canadian oil resources to world markets where we can get a fair price for them".

"When we are faced with an exceptional situation that puts jobs at risk, that puts our global reputation on the line, our government is prepared to take action", Morneau told reporters.

British Columbia insists the sale of Kinder Morgan Inc.'s pipeline to Canada's federal government won't sway its opposition to a project seen as a lifeline to the nation's oil industry.

The Trans Mountain project is created to increase capacity of the 65-year-old pipeline from Edmonton, Alberta, to Burnaby, B.C., from 300,000 to 890,000 barrels per day.

"He had an opportunity to walk away from pipeline politics and get on with the real work of leading Canada, and the world, in a 100 per cent renewable energy revolution, but instead he's opted to ignore science, Indigenous rights and the voices of people across Canada and bailed out a unsafe, unwanted pipeline with public money".

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. Besides Trans Mountain, it also owns crude-oil storage and rail terminals in Alberta, the Vancouver Wharves Terminal and the Cochin condensate pipeline system.

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