KINDER MORGAN PEEVED, BUT STICKING TO PLAN
Company president wants Ottawa to exert its authority over B.C. in pipeline dispute
Somewhere between a bitumen blockade and a wine embargo, an energy company is trying to get a pipeline built.
Despite the tit-for-tat trade actions between Alberta and British Columbia, the president of Kinder Morgan Canada Ltd. insists the company is moving ahead, committed to building the project at the centre of a national firestorm.
But Ian Anderson acknowledges he’s discouraged by the B.C. government’s latest attempts to sidetrack the $7.4-billion Trans Mountain pipeline expansion with proposed regulations and restrictions on transporting oil.
He wants the federal government to assert its authority in a morass that’s become as sticky as bitumen itself.
“We are not close to pulling the pin. We are focused on creating the environment and the certainty that we need,” Anderson said Wednesday at the company’s office in Calgary.
“I am frustrated with the difficulty we’re having in creating clarity around a project that was approved, that was reviewed, that has been consulted on for years. We need to get past that and get on to execution ...
“So yeah, I’m frustrated with the time it’s taking to get that clarity and certainty, and actions like what B.C. has undertaken provide further measure of frustration.”
For anyone blissfully trying to ignore the Great Pipeline Fight of 2018, the Trans Mountain line currently moves about 300,000 barrels a day of petroleum and refined products from the Edmonton area to Burnaby.
Kinder Morgan wants to triple the capacity, amid industry expectations the project will reduce the growing price discount on Canadian heavy crude.
The company first applied in 2013 to the National Energy Board to move the proposal ahead, received regulatory approval in 2016 and won federal backing later that year.
Today, the development is a full year behind its construction schedule, now slated to start in December 2020, as it’s struggled to get necessary permits.
The government of B.C. Premier John Horgan has pledged to use every tool at its disposal to stop the venture.
Tensions ratcheted up last week after B.C. proposed regulations to limit the amount of diluted bitumen that can be shipped by pipelines or rail into the province, despite the fact this falls under federal authority.
Premier Rachel Notley retaliated Tuesday by blocking all B.C. wine imports into Alberta.
Kinder Morgan has been relatively quiet during the latest donnybrook, but Anderson said he welcomes Alberta’s support, while calling B.C.’s proposal a step designed to “frustrate, delay and attempt to stop the project.”
Anderson agrees with Alberta’s premier that this is no longer a dispute between two provinces. Instead, it’s a tug of war between B.C. and the federal government over jurisdiction and power.
It also strikes at the heart of trade within the Canadian federation and whether one province with a coastline can frustrate another one from using it to get products to markets.
“We didn’t look to be at the nexus of a trade dispute between provinces. But it certainly speaks to the severity and the consequences that the B.C. actions have certainly signalled,” he said.
Anderson sent a letter to B.C.’s premier Tuesday seeking a meeting — they’ve haven’t sat down since last year’s election — and outlining his concerns, particularly over the attempt to limit bitumen transportation through the province.
“The implications of such a threat strike directly at the heart of our country’s oil and natural gas producers and producing provinces,” the letter states.
Horgan isn’t backing down, saying his province wants to better understand the behaviour of spilled bitumen in case of a catastrophic accident. It also wants to create a scientific advisory panel to recommend how heavy oils can be safely transported and cleaned up.
“I believe that is well within our jurisdiction,” he told reporters Wednesday.
“I am here for B.C., not for Alberta.”
But the National Energy Board already looked into the spill issues, and Ottawa has ruled the project can be safely constructed and operated.
Lost in the political shuffle is the project itself.
Kinder Morgan began work last fall on a new oil-loading facility in Burnaby, although other construction hasn’t started yet.
The first order of pipe has arrived at its facilities in Alberta and the company will spend about $1.5 billion on the project this year. However, spending would be double that amount if it had full assurances the venture wasn’t going to be sidetracked.
“Certainly our investors are concerned about not just starting the project, but completing the project,” Anderson said.
Here’s another issue at play for the entire country to think about.
How can Canada attract future investment if major industrial projects approved by regulators and the national government can be stymied and obstructed?
“What they are trying to do (is) send a message to investors and to harass the project,” Notley said Tuesday.
Finally, why isn’t the federal government stepping more forcefully into this feud?
Prime Minister Justin Trudeau said Wednesday he will “continue to engage with the premiers on a regular basis,” but offered no assurances he will intervene to stop the trade war escalating.
It’s the equivalent of a hockey referee seeing a brawl break out and skating off the ice, leaving the two sides to foil up their fists and swing away.
Anderson welcomes recent remarks from the prime minister that Trans Mountain will be built, but wants to see more action.
“I’m expecting the federal government to impress upon British Columbia directly how their actions are out of line with the federal jurisdiction,” he said.
“And I would also expect the federal government to look at what other tools they may have in their tool box, from a legislative and constitutional standpoint, to assert that authority.”
A resolution in the coming days doesn’t seem likely.
The B.C. bitumen blockade has fermented anger in Alberta, turning into a wine war.
All of industry is carefully watching what the next steps will be — including the company in the crosshairs of the conflict.