Published: Thu, May 31, 2018
Science | By Cecil Little

Federal government spending $4.5B to buy Trans Mountain pipeline, BC terminal

Federal government spending $4.5B to buy Trans Mountain pipeline, BC terminal

An ardent supporter of the Trans-Mountain pipeline expansion, Kamloops-Thompson-Cariboo MP Cathy McLeod said she was disappointed to learn Tuesday that the federal Liberal government had purchased Kinder Morgan's Canadian assets.

"Our regulatory processes are fundamentally broken", the Business Council of British Columbia said in a statement.

What's more, a poll in April found that a growing number and a majority of British Columbians actually support the pipeline project.

When asked again about the timeline to get taxpayers off the hook he said they have to be sure it gets built. The Texas-based pipeline company structured deals in such a way that it couldn't lose, even if the project stalled.

Discussing the plan on Tuesday, Finance Minister Bill Morneau said the government acted to remove political uncertainty and ensure the project goes forward as the summer construction season nears.

'Justin Trudeau promised, ' he says.

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"It's very hard to imagine anyone else stepping up where Kinder Morgan feared to tread". He said that shareholders would receive a "fair price" for the assets.

What kind of a stupid nation buys a leaky pipeline from a bunch of good old Texas boys without doing any due diligence? "It's a government that committed to the United Nations declaration on the rights of indigenous peoples", says Mike Hudema, climate and energy campaigner at Greenpeace Canada.

Finance Minister Bill Morneau said purchasing the pipeline was the only way to ensure that a planned expansion could proceed.

Read the rest at the Toronto Star. "We will not stand down no matter who buys this ill-fated and exorbitantly priced pipeline". "The lack of leadership on this issue is now fully evident".

In 2020, which the company had expected would be the first full year of expanded operations, it was looking at adding $900 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) just from the maximum 80 per cent of capacity it was legally allowed to lock in at long-term rates. Trudeau is coming under fire from all sides. The three groups, as well as Burnaby Residents Opposing Kinder Morgan Expansion, have been regularly demonstrating in different ways at Trans Mountain's two Burnaby facilities over the last few months. "Kinder Morgan wasn't asking for the money". "The prime minister is forcing Canadian taxpayers to pay for his failure". The oil industry welcomed the news, although cautioned that it shouldn't become the norm.

While the feds say they intend to sell the pipeline to another company, Ross expressed doubts as to whether that would, in fact, ever happen.

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Storm surge flooding was less of a concern because Alberto's arrival would not coincide with high tide, he said. This is common for early season storms and in fact, hurricane season doesn't begin until June 1.


David Hughes, a former federal government scientist and research expert with the Canadian Centre for Policy Alternatives, disputes Ottawa's and Alberta's claim that delays in constructing the pipeline are costing Canada $15 billion a year.

He's right on that account.

Financing for this purchase will come from Export Development Canada.

Those shippers committed to sending crude on the expansion include BP Canada, Canadian Natural Resources, Cenovus Energy, Imperial Oil, Husky and Suncor.

WCS fell to the mid-$40s per barrel this week, more than $20 lower than WTI and almost $30 lower than Brent. Regardless of who owns the pipeline, Moe says he hopes concerns out of British Columbia will be addressed. The government also does not have a buyer in mind to eventually take on the project.

However, de Bever said that sometimes Canadians are "too hard" on themselves and the Trudeau government's move could help speed up construction of the pipeline.

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