PIPELINE IN PERIL?
Kinder Morgan boss suggests B.C. is making $7.4B project ‘untenable’
$7.4B project may be ‘untenable’
EDMONTON Premier Rachel Notley has waved aside comments by Kinder Morgan CEO Steve Kean, who said late Wednesday he has seen nothing to change his mind over his company’s suspension of the Trans Mountain pipeline expansion project.
Kean told an earnings conference call that events in recent days have reinforced his concerns about the $7.4-billion project’s viability.
His company suspended work on the project earlier this month because the investment may be “untenable for a private party to undertake.” Kean said developments over the past 10 days have “confirmed” those views.
Those 10 days have included a sit-down between Notley, Prime Minister Justin Trudeau and B.C. Premier John Horgan; discussions about buying the pipeline with public dollars; and Alberta introducing legislation to control oil, gas and refined fuel exports.
On Wednesday, B.C. declared it’s launching yet another court challenge to determine if it has jurisdiction over the project.
Kean made his comments at the same time Notley faced budget estimates in Edmonton.
Speaking with reporters after the meeting, Notley said Kean’s comments don’t jibe with the conversations she and her officials have had with Kinder Morgan.
“We’re pleased that the conversations to reduce or eliminate investor risks have accelerated significantly over the last little while,” she said. “The message we’re getting back is they are pleased with the high level of engagement happening between us and the federal government.”
Notley said she won’t enter into public negotiations; those who need to be at the table to sort this whole thing out are there doing their work, she said.
“We have tight timelines to make some decisions and bring about outcomes that are fundamentally important to the province of Alberta and the country. I remain confident we will be successful in meeting those deadlines,” she said.
United Conservative Party Leader Jason Kenney said late Wednesday the message from Kinder Morgan shouldn’t be a surprise.
“I think this just shows the premier is completely out of touch with the reality,” he said.
“She’s constantly had this tendency to declare victory when we’re further and further away from the certainty we need for this project. I wish the premier was more focused on reality than wishful thinking.”
Albertans who want to see the Trans Mountain pipeline built can take away some positive news from a new poll Wednesday, but they should also heed a warning.
Shutting off the oil taps to British Columbia could backfire.
Public opinion in Canada — even in B.C. — has moved into majority territory supporting Kinder Morgan’s expansion of its Trans Mountain pipeline, according to a poll by the Angus Reid Institute.
The poll of 2,125 Canadians released Wednesday shows 55 per cent now back the pipeline project, up six percentage points since February.
About one in four Canadians are opposed. The rest are unsure.
On the other side of the Rocky Mountains, where the debate is most intense, 54 per cent of British Columbians favour the development.
Even on Vancouver Island and in metro Vancouver, a hotbed of pipeline opposition, a slender majority of respondents support the venture, according to the online poll conducted earlier this week.
“We are starting to see a hardening, a shifting in support that ticks toward … completion of this pipeline,” said institute executive director Shachi Kurl.
“This is not necessarily a changing of views as a result of Alberta rattling its sabre, it’s a result of British Columbians having little stomach to get into a fight over co-operative federalism or constitutional jurisdiction.”
The Trans Mountain pipeline, which transports oil and refined petroleum products from Alberta to the Pacific coast, has become a flashpoint for an intense national political debate in recent weeks.
Despite daily protests against the project, it’s worth pointing out more people in every region of the country — including Quebec and Ontario — back the project than oppose it.
In Alberta, eight in 10 support the pipeline.
This gives Premier Rachel Notley a lot of political room in her fight with the B.C. government, which is attempting to foil the development.
“We’ve always known there’s a lot of support. I think the supporters are becoming more vocal,” Energy Minister Marg McCuaig-Boyd told reporters at the legislature.
Her comments came the same day the government of B.C. Premier John Horgan announced it will send a reference question to that province’s Court of Appeal by the end of the month. His government is trying to determine if it can legally restrict bitumen shipments into the province.
The case may be up in the air, but Horgan is clearly losing ground in the court of public opinion.
Almost two-thirds of Canadians say B.C. is wrong in its attempts to derail the federally approved pipeline.
“Having the discussion we’ve had over the last two weeks has been very positive,” said Tim McMillan, head of the Canadian Association of Petroleum Producers.
“The more they know about it, the more they’re inclined to support it.”
HARD TRUTHS
But before supporters start preparing for a victory parade, there are some other hard truths to consider.
Most Canadians — 56 per cent — think it’s a bad idea for the federal and Notley government to become investors in the Trans Mountain project.
Kinder Morgan announced last week it would suspend all discretionary spending on the $7.4-billion venture until it receives more certainty on being able to complete construction.
Prime Minister Justin Trudeau said Sunday he would begin talks with Alberta and Kinder Morgan about taking financial steps to de-risk the venture from further delay.
On Wednesday, Kinder Morgan CEO Steve Kean wouldn’t discuss the state of negotiations, but confirmed they have commenced.
Notley has talked about acquiring a stake in the pipeline to get it built, even buying it outright.
In Alberta, the investment idea draws a mixed response: 52 per cent think it’s a good use of taxpayer money, but 48 per cent are against it.
Political efforts to strong-arm British Columbians, such as Alberta’s new Bill 12 that would let the province restrict exports of crude oil and products to spike gasoline prices in the Lower Mainland, appear to be less effective in winning over opponents, Kurl said.
She noted a majority of B.C. residents are concerned about the potential risks of a spill due to increased oil tanker traffic tied to tripling the pipeline’s capacity.
So what line should Alberta take in the weeks ahead?
Across Canada, 63 per cent believe a soft approach is needed with incentives and compromises to encourage B.C. to relent. Only 37 per cent — but 74 per cent in Alberta — back a “hard line” approach.
When asked what the Horgan government should do if Alberta throttles back oil exports, 53 per cent of B.C. respondents said the province should back down, but 47 per cent say it should stand firm against it.
However, if the courts rule B.C. doesn’t have the authority to block a pipeline — and this one is clearly under federal jurisdiction — 69 per cent of British Columbians say their government should give up.
With public sentiment moving in favour of building Trans Mountain, it makes sense for Notley to stick to her current strategy and not turn down the oil taps, said political scientist David Moscrop at Simon Fraser University. “Why would you use the stick? There’s no reason to do it, but there’s plenty of reason to have it, because it makes you look tough,” he said.
Finally, as the Trans Mountain fight continues, it appears the economic message is sinking in about the need for more pipeline capacity in Canada.
Two in three Canadians believe building the pipeline would help the Alberta economy, while 59 per cent say it’d help the country’s economy.
And three-quarters of Canadians believe the pipeline will likely be built.
The donnybrook over the need to build energy infrastructure in the country has become messy and divisive.
But, slowly, it appears a national consensus is forming: get the Trans Mountain project built.