Kinder Morgan Cool To Ottawa’s Offer On The Trans Mountain Pipeline

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OTTAWA—The federal government says it is prepared to offer offer Kinder Morgan, owners of the controversial Trans Mountain pipeline, a taxpayer-funded guarantee to cover any losses it may suffer because of political opposition from the B.C. government to the project.

Finance Minister Bill Morneau told a Wednesday news conference that Ottawa has a “clear role to play” to safeguard the pipeline expansion against the financial risks caused by court challenges launched by the B.C. Premier John Horgan’s government.

“We are prepared, for example, to indemnify the project against any financial loss that derives from Premier Horgan’s attempts to delay or obstruct the project,” said Morneau, whose remarks were prepared.

If Kinder Morgan decides not to proceed with the megaproject, those financial assurances would be available to any company that took it over, Morneau said.

But he did not how much money the government would fork out to back the project anew, and he did not indicate whether the government, itself, would be prepared to take an equity stake in the company, but nor did the finance minister rule it out.

Morneau insisted that Kinder Morgan’s proposed expansion of an existing pipeline is “commercially viable” and said the government is acting in a “fiscally responsible” way to ensure a project, it deems in the national interest, proceeds.

Other details were scarce.

Morneau would not say, for example, how the federal government would determine which costs of the delay are the result of “politically motivated” actions by the B.C. government.

Morneau was careful not to criticize outright the legal challenges brought by Indigenous communities or environmental activists, saying he assumed Canadians were making their objections “in good faith.”

However, Morneau stressed, as the prime minister and his other ministers have repeatedly said, that the company and the government have consulted widely, followed all the regulatory processes, and the project was approved by both the federal and a previous B.C. government.

Read more:

Kinder Morgan faces $450M ‘wake-up call’ at shareholder meetings

Local environmentalists fighting pipelines and perceptions in the heart of oil country

Most Canadians agree Kinder Morgan brought pipeline conflict onto itself: Angus Reid poll

After killing another Alberta-B.C. pipeline, known as the Northern Gateway, the Liberal government enthusiastically backed the Trans Mountain expansion, with Prime Minister Justin Trudeau vowing that it’s in the country’s “vital, strategic interest” and “will get built.”

Texas-based Kinder Morgan, owner of the controversial project, announced in early April it was suspending non-essential work on the pipeline project, citing “extraordinary political risks” given the opposition of the B.C. government.

Morneau spoke in Ottawa just before Kinder Morgan Canada shareholders met in Calgary for an annual general meeting.

The company’s stock price bounced around during and after Morneau’s news conference.

Other parties reacted swiftly to the news of potential compensation.

Greenpeace Canada spokesman Mike Hudema said the federal government is making a huge mistake in backing a “destructive project,” when even the owner doesn’t appear to want to back it.

“Signing a taxpayer-backed blank cheque with Kinder Morgan’s name on it is the definition of throwing good money after bad and Canadians shouldn’t be on the hook for the big losses this project will likely incur,” Hudema said in a written release.

He said it isn’t just the B.C. government which poses a big risk to the project; other major risks include legal challenges from First Nations, environmental groups and municipal governments, “potential legislation in the U.S., along with growing, on-the-ground opposition from land and water protectors willing to face arrest to stop this project — from Vancouver to Seattle to Quebec and beyond. This project isn’t moving forward. The federal government should cut their losses, not double down on them.”

Finance Minister Bill Morneau has been consulting with Kinder Morgan about providing taxpayer-backed financial assurances to guarantee the pipeline goes ahead.© Sean Kilpatrick Finance Minister Bill Morneau has been consulting with Kinder Morgan about providing taxpayer-backed financial assurances to guarantee the pipeline goes ahead.

Conservative MP Michelle Rempel, who represents a Calgary riding, posted her “hot take” on the offer, saying the government provided “no details” about the scope of what’s on offer or “if Kinder Morgan actually wants it. Seems like a desperate way of pinning the blame on (the company) if they pull plug.”

Rempel said the Liberal government should invoke federal constitutional power over interprovincial infrastructure such as pipelines and “remove the ability of the B.C. government to hold up the project with delays on things like permits to build roads out to the project site.” In addition, Ottawa should immediately refer any B.C. government court challenges directly to the Supreme Court, and “ensure rule of law is enforced,” she tweeted.

Trudeau had instructed Morneau in April to consult with Kinder Morgan about providing taxpayer-backed financial assurances to guarantee its go-ahead.

The company had set a deadline of May 31 to consult with stakeholders to reach agreements that would allow the project to proceed. That includes assurances for company shareholders about the financial risk and “clarity” on the ability to build the pipeline through B.C.

Secret talks between the federal and Alberta governments and Kinder Morgan have played out in recent weeks in Ottawa, Toronto, Calgary and Houston about a financial plan to underwrite the political risks, which the company claims are a threat to the project.

The Trans Mountain pipeline expansion, meant to double the amount of Alberta bitumen oil shipped to port near Vancouver for transport overseas, has run into stiff opposition in B.C. from some Indigenous groups, citizens and the minority NDP government.

The B.C. government is pushing ahead with a court challenge to Ottawa’s claim to sole jurisdiction over the environment. Premier John Horgan wants a ruling from the court that would allow his minority NDP government to block Kinder Morgan from increasing flows of heavy crude, in the name of protecting B.C.’s coastal waters.

That opposition has put B.C. sharply at odds with Alberta, which sees the project as critical for its economic success.

Source : https://www.msn.com/en-ca/news/canada/ottawa-prepared-to-compensate-kinder-morgan-for-delays-to-project-morneau-says/ar-AAxnvwY

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