When will Justin Trudeau do something?!!
Kinder Morgan halts non-essential work on Trans Mountain pipeline and sets drop-dead deadline
Kinder Morgan pointed to the “uncertainty” created by the opposition of the B.C. government as the reason for the sudden announcement and said it will take until May 31 to consult with stakeholders to determine whether the project will continue construction through B.C. and whether shareholders can be protected.
If the company cannot reach an agreement with the various stakeholders by the May 31 deadline, Kinder Morgan chairman and CEO Steve Kean says it is “difficult to conceive of any scenario in which we would proceed with the project.”
In a Monday morning conference call, Kean reiterated the company’s need to protect investors and mitigate financial loss if the project misses key construction timelines.
“We can’t move the seasons in Canada. There are certain seasons during which you can do certain things. Mobilization for construction, the opening and closing of windows for clearing activities, materials to be ordered – we’re on top of all of that right now,” he said.
“We don’t have the ability to just kick the can down the road. We have to make a decision and we made it. It’s difficult because of those other considerations but it is an easy decision to make for investors.”
He said the end of next month was chosen as a deadline due to the construction timeframes required by the project, and expressed reluctance that the project could be delayed until next May.
“We don’t have control over that or control over timing and we don’t purport to say – this is what you must do or by when,” said Kean. “We don’t have the power to convene governments into these discussions but we are expressing our openness to participating in that process.”
Kean’s original statement goes on to note that while the project has support from the federal government and the provinces of Alberta and Saskatchewan, the province of British Columbia and its government has continued to be a barrier to the project’s progress.
“The fact remains that a substantial portion of the project must be constructed through British Columbia, and since the change in government in June 2017, that government has been clear and public in its intention to use ‘every tool in the toolbox’ to stop the project,” he said.
“The uncertainty created by B.C. has not been resolved but instead has escalated into an inter-governmental dispute.”
What “non-essential activities” are and what they would cost wasn’t made clear in the statement. To date, Texas-based Kinder Morgan says they’ve spent about $1.1 billion on the project.
The Trans Mountain project would twin an existing pipeline, tripling the flow of oil flowing to the B.C. coast from Alberta. To date, the company says it has spent about $1.1 billion on the project.
In recent months, B.C. Premier John Horgan and Alberta Premier Rachel Notley have had public spats over the future of the pipeline, even throwing in trade threats at one point. The pair have regularly traded jabs in interviews and news conferences, with each declaring victories at various steps of the project.
In a Sunday press conference, Notley said the pipeline “must be built” and threatened government action against B.C. if the Horgan government — whom she called “short-sighted” — continued to oppose the project. She called on Prime Minister Justin Trudeau to act in defence of the project, which the federal government has approved.
“Albertans have been clear: Get this pipeline built. And Albertans are right,” she said Sunday. “Never count Alberta out. This pipeline will be built. Tens of thousands of jobs and billions of dollars to the economy. Better public schools. Better public hospitals. That’s what this pipeline means for us and for our country as a whole. We have won a series of important and decisive legal victories. The courts threw out B.C.’s last case without even hearing it. And I am confident we will continue to win. We are also calling on the federal government to act in the defence of Alberta and working people in Western Canada in the way they have in the past for other parts of this country. A federal approval of a project must be worth more than the paper it’s written on.”
Notley called on Prime Minister 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 on Sunday, Prime Minister Justin Trudeau reiterated his support for the project. He’s spoken openly of the economic need for the project to be completed.
“Canada is a country of the rule of law, and the federal government will act in the national interest,” he said on Twitter. “Access to world markets for Canadian resources is a core national interest. The Trans Mountain expansion will be built.”
Trudeau was in Saskatchewan on Sunday, visiting with families and survivors of the Humboldt bus tragedy.
Later Sunday, a calm and collected Horgan said at a press conference that he’d spoken twice this week with the prime minister and has also spoken with Kinder Morgan’s leadership and said he hoped to speak with Notley later on Sunday.
“The interests of Texas boardrooms are not the interests of British Columbians,” he added, referring to the location of Kinder Morgan’s corporate offices.
“The risk is too great,” he said more than once.
“(Kinder Morgan’s) Ian Anderson told me that he believes the project Kinder Morgan has been undertaking has been unnecessarily harassed by British Columbia and I told him I disagreed,” Horgan said. He said the NDP had campaigned last year “to defend our water, our lands and most importantly our coast.”
He said he’d told Trudeau he disagreed on the pipeline being in the national interest and criticized the National Energy Board’s review of the project, saying it was flawed and pointed 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.”
He also pointed to his government’s commitment to its climate change policies, like a rising carbon tax.
“It’s been said we are somehow compromising the climate action plan for the country and I profoundly disagree with that… I reject the notion that somehow our opposition to risk to our coast and our economy is somehow tied to the national climate plan.”
“I have no intention of escalating controversy across the country, I have every expectation people will protect British Columbia’s right to defend our interest and defend our coast.”
He dismissed any suggestion that his government’s position could lead to a constitutional crisis.
“There was no constitutional crisis when energy east was cancelled,” he said, pointing to the pipeline which was to carry oil from Alberta to refineries and ports in Eastern Canada. It was cancelled in October.
“This is not something that’s unique.”
University of Alberta economist Andrew Leach said in a tweet that comparing Energy East and the Trans Mountain projects wasn’t reasonable. Energy East “was the least attractive option to get crude to market,” he said, while Trans Mountain matters “because it’s the best option and not building it significantly compromises (the) value of (Alberta) natural resources.”
“The value of Energy East was largely derailed by a glut of global crude oil,” he added.
B.C. Liberal leader Andrew Wilkinson criticized Horgan’s government for their position.
“The premier has let his activist environment minister ignore the rule of law as this government picks winners and losers by willfully ignoring the constitution,” he said. “Investors large and small interested in our province need to know the provincial government will treat everyone fairly and equally.”
“This is a project that has received federal approval and falls under federal jurisdiction, yet the NDP used it to pick a trade war with Alberta and start a confrontation with the federal government.”
The RCMP say they have arrested about 200 people demonstrating around the Trans Mountain facilities since mid-March, and while most face charges for civil contempt, officers have also made arrests for mischief, obstruction and assault of a police officer.
Opponents of the pipeline were excited by Kinder Morgan’s announcement.
“The writing is on the wall, and even Kinder Morgan can read it,” Greenpeace’s Mike Hudema said. “Investors should note that the opposition to this project is strong, deep and gets bigger by the day. This announcement shows that this widespread opposition has reached critical mass. British Columbians’ desire to protect clean water, safeguard the environment and stand behind Indigenous communities cannot be ignored or swept under the rug. We encourage Kinder Morgan to shelve this project before the litany of lawsuits, crumbling economics, and growing resistance against the pipeline does it for them.”
Stand.Earth, another environmental group opposed to the project, questioned how much more Kinder Morgan’s investors could stomach.
“Clearly, investors have lost confidence in this project and are waking up to the reality that the Kinder Morgan pipeline will never be built” Stand.Earth’s Sven Biggs said in a statement. “We have known for a while now that the opposition to this pipeline from Indigenous leadership, protesters, and the province of B.C., is just too strong for it to ever to become a reality, and now even Kinder Morgan has had to admit that.”
Last week, the prime minister made stops in B.C. where he was greeted by anti-pipeline protesters in Victoria and Vancouver.
During the appearances, Trudeau said the federal government needs to build a strong economy and protect the environment at the same time, adding that he has faith in his government’s ocean protection and emergency preparedness plans.
“I would not have approved this pipeline had I not been confident of that,” he said.
Sunday, federal Minister of Natural Resources Jim Carr said the Trudeau government will do everything it can to see that the project is completed and that the Horgan government stood 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.
“It is not in the interests of the B.C. government for investors to think B.C. is not a good place to invest,” he said. “There are consequences to those actions and we’re seeing those consequences.”
“We will act in Canada’s national interest to see that this project is built. Our government’s approach to resource development will grow our economy and protect the environment. These are not competing interests, they are shared priorities,” he told reporters in Ottawa. “The Government of Canada believes that the Trans Mountain Expansion pipeline is in our national interest, which is why we approved the project and why we continue to stand by our decision.”
“The Government of Canada calls on Premier Horgan and the B.C. government to end all threats of delay to the Trans Mountain Expansion. His government’s actions stand to harm the entire Canadian economy. At a time of great global trade uncertainty, the importance of Canada’s role in the global energy market is bigger than individual projects and provinces.”
Asked by reporters what the federal government was thinking of doing next, Carr responded: “all options are on the table.”
Pressed for specifics, he simply said: “We’re not ruling anything out.”
The Independent Contractors and Businesses Association said they were “floored by today’s news that Kinder Morgan is close to pulling the plug on this vital national project because of the interference of the B.C. Government” and called on the prime minster “to get the Trans Mountain Pipeline Expansion project built.”
“By strangling Trans Mountain, the B.C. NDP Government would throw away $5.7 billion in provincial tax revenue, $1 billion in municipal tax revenue, and the opportunities that come with 15,000 construction jobs and 189,000 person-years of employment,” ICBA president Chris Gardiner said in a statement. “This decision will send a simple chilling message to businesses looking to start or expand major projects here – stay away from B.C. because you cannot rely on the government to honour its commitments or follow the law.”
Federal Conservative leader Andrew Scheer said Sunday’s announcement was “devastating news for Canada’s energy sector and Canadian workers.”
“The blame for this development rests squarely on the shoulders of Justin Trudeau. He has failed to take a single concrete step to ensure this project is completed. All he has done is give us empty words with no action.”
Kinder Morgan’s Kean noted that it was not his company’s role to play referee between the various levels of government.
“A company cannot resolve differences between governments. While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments,” said Kean.
Kean noted that while KML is a “very good midstream energy company with limited debt,” the uncertainty surrounding the project has prompted the company to “protect the value that KML has, rather than risking billions of dollars.”
Kinder Morgan will host a press conference on Monday morning to speak on its announcement.