May 30, 2018 Read More →

Canada to Buy Troubled Trans Mountain Pipeline

Reuters:

Canada will buy Kinder Morgan Canada Ltd’s Trans Mountain pipeline for C$4.5 billion ($3.5 billion), the government said on Tuesday, hoping to save a project that faces formidable political and environmental opposition.

Finance Minister Bill Morneau said purchasing the pipeline was the only way to ensure that a planned expansion could proceed. The pipeline, running from the oil sands of Alberta to a port in the Pacific province of British Columbia, would allow Canadian crude to gain greater access to foreign markets and higher prices.

Kinder Morgan Canada gave Ottawa until May 31 to come up with reassurances it could press ahead with plans to more than double the capacity of the existing pipeline amid efforts by British Columbia to block construction. The company also faced opposition from environmentalists and aboriginal groups who worried about the pipeline spilling its tar-like heavy oil.

Although Ottawa has taken stakes in struggling energy projects, Tuesday’s announcement marked the first time Ottawa has bought an entire pipeline. It does not intend to own the project for long.

The move drew immediate criticism from both sides of the political spectrum, and could hurt Trudeau’s popularity in the key British Columbia battleground in a 2019 federal election.

Morneau sidestepped questions about how Ottawa will deal with opposition from environmentalists and aboriginal groups, who cite the risk of a catastrophic spill. Morneau said more spending would be needed to complete the expansion, but gave no precise financial details, and stressed he felt the project should be returned to the private sector.

More: Canada to Buy Kinder Morgan Oil Pipeline in Bid to Save Project

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