MORE ON PIPELINE FEUD, Page 6
Even as Kinder Morgan announced it had suspended all non-essential spending on the $7.4-billion Trans Mountain oil pipeline expansion, pipe for the project was delivered to a staging area last week in New Westminster.
Kinder Morgan’s suspension announcement a week ago Sunday was part of an ultimatum in which the Houston, Texas-based company said it needed certainty by May 31 that the project can be built or it will walk away.
The environmental group Wilderness Committee snapped photos of the pipe delivery last Thursday, just four days after the ultimatum. They show two transport trucks delivering loads of pipe to the staging site next to the Fraser River east of Brunette Avenue in New Westminster. Another photo shows pipe stacked along a fence at the site.
Work also continued last week on Burnaby Mountain, where land was being cleared for additional oil storage tanks at an existing Kinder Morgan site.
In a written response, Kinder Morgan spokeswoman Ali Hounsell said Monday that with a project of this scope and size, there is a long lead time required for the procurement of materials and contracting of work. “As such, materials that were ordered and were in transit before last week’s announcement are arriving at work sites, and some essential work that has already started may be continuing,” said Hounsell. She reiterated that Kinder Morgan has suspended non-essential spending.
Wilderness Committee official Peter McCartney said he believes the continuing work and pipeline deliveries show Kinder Morgan is simply trying to shake down the federal government. “I know they have put off some of the bigger spending decisions but at this point this is just extortion,” said McCartney.
The Wilderness Committee is among many environmental groups vehemently opposed to the project over concerns about oil spills and climate change linked to oil extraction and production. Other opponents include some First Nations, community groups and municipalities such as Vancouver and Burnaby.
The project will twin the pipeline and triple pipeline capacity and is meant to open up new markets for bitumen from the Alberta oilsands. For more than a decade, Alberta oil producers have been trying to get a pipeline to the west coast to diversify markets away from the United States.
Backers of the Trans Mountain project include oil producers, business groups and some unions and municipalities.
Kinder Morgan’s chief concern is a reference case that B.C. Premier John Horgan intends to send to Federal Court to determine the province’s jurisdiction to restrict bitumen shipments through B.C.
Prime Minister Justin Trudeau’s federal government and Alberta Premier Rachel Notley’s Alberta government are considering taking some kind of financial position in the project to provide investor security for Kinder Morgan.
Following a Sunday meeting with Horgan and Notley in Ottawa, Trudeau said his government was also preparing legislation to underscore federal jurisdiction over the pipeline. On Monday, Alberta introduced legislation that would give it power to restrict the flow of fuels such as gasoline to B.C.
Ed Kallio, a principal of Calgary-based Eau Claire Energy Advisory Inc., said there is little likelihood the jurisdictional issue, which could be sent to the Supreme Court of Canada, will be determined by May 31.
Expropriating land along the corridor is also a possibility for the federal government but is also not likely to happen by May 31, said Kallio.
It’s why the Trudeau government has little option, he said, but to indemnify Kinder Morgan’s investment in some fashion.
“They’ve already put $1 billion into the project and they are not going to put another $7 billion until they can de-risk it ... They are spending real money here,” said Kallio.
Kallio said he believes the company was waiting for the federal government to act more forcefully, but when they didn’t, decided to deliver an ultimatum.