Kinder Morgan slows work on pipeline project
Company halts ‘non-essential’ spending, says end to uncertainty is needed to go on
The future of the $7.4-billion Trans Mountain pipeline project is up in the air after a surprise announcement Sunday that Kinder Morgan is halting all “non-essential activities and related spending.”
As an explanation, Kinder Morgan pointed to the “uncertainty” and “unquantifiable risk” for investors created by the opposition of the B.C. government.
Stakeholders will be consulted and if a final decision to continue can’t be reached by May 31 — putting a whole construction season in doubt — Kinder Morgan chairman and CEO Steve Kean said it will be “difficult to conceive of any scenario in which we would proceed with the project.”
He added: “As KML has repeatedly stated, we will be judicious in our use of shareholder funds.”
Kean’s statement didn’t elaborate on how much money would be saved over the coming weeks by suspending “non-essential” work. To date, the Texas-based company says it has spent about $1.1 billion on the project.
Reacting to the announcement, Alberta Premier Rachel Notley again vented her fury at the B.C. government’s opposition to the project, calling it “short-sighted.”
“Albertans have been clear: Get this pipeline built. And Albertans are right,” she said Sunday. “Never count Alberta out. This pipeline will be built. (It means) tens of thousands of jobs and billions of dollars to the economy.”
Notley called on Prime Minister Justin Trudeau to take more “concrete action” to get the pipeline built, adding that legislation is coming in the next few days to give her the power to turn down the taps on oil headed to B.C. Other retaliatory actions, such as a renewed ban on B.C. wine, are also being contemplated, she said.
Later Sunday, Trudeau reiterated his support for the project.
“Canada is a country of the rule of law, and the federal government will act in the national interest,” the prime minister said on Twitter. “Access to world markets for Canadian resources is a core national interest. The Trans Mountain expansion will be built.”
Looking calm and collected, B.C. Premier John Horgan declared in a Sunday press conference that “the interests of Texas boardrooms are not the interests of British Columbians.”
“The risk is too great,” he said more than once.
He said the NDP had campaigned last year “to defend our water, our lands and most importantly our coast.”
And he criticized the National Energy Board’s review of the project, saying it was flawed, pointing to ongoing court action his government is engaged in.
“It is our view that provincial jurisdiction should prevail in many areas affected by this process,” he said. “It’s obviously the responsibility of the federal government to assert jurisdiction where it thinks it has it, and it’s the responsibility for the province to push back where we believe our jurisdiction has been tampered.”
Horgan said he disagrees with Trudeau’s position that the pipeline is in the national interest. And he also disagreed with suggestions that the province is “compromising ” the federal government’s climate plan.
“I have no intention of escalating controversy across the country,” he said. “I have every expectation people will protect British Columbia’s right to defend our interest and defend our coast.”
He dismissed any suggestion his position could lead to a constitutional crisis: “There was no constitutional crisis when Energy East was cancelled,” he said, pointing to the pipeline that was to carry oil from Alberta to refineries and ports in Eastern Canada, but was cancelled in October.
But University of Alberta economist Andrew Leach said on Twitter it isn’t reasonable to compare the Energy East and the Trans Mountain projects. Energy East “was the least attractive option to get crude to market,” he said. “The value of Energy East was largely derailed by a glut of global crude oil.
Trans Mountain is a much better option, he said. “Not building it significantly compromises (the) value of (Alberta) natural resources.”
Federal Natural Resources Minister Jim Carr said Sunday the Trudeau government will do everything it can to see that the project is completed. He said the Horgan government’s actions threaten to harm “the entire Canadian economy.”
Carr said Sunday’s news wasn’t expected, but his office was aware that delays and uncertainty posed by B.C’s threats were having an impact.