Feds prepared to compensate Kinder Morgan for project delays

OTTAWA (NEWS 1130) – The federal government is prepared to put your money behind the Trans Mountain expansion project.

Finance Minister Bill Morneau says, with construction of the pipeline stalled because of opposition from our provincial government, the feds have little choice.

“We’re prepared, for example, to indemnify the project against any financial loss that derives from Premier [John] Horgan’s attempts to delay or obstruct the project.”

Horgan did take a minute to respond to Morneau pinning the blame on his for project delays after a speaking engagement in downtown Vancouver this morning. “I’m not causing any of this because I’m issuing permits as they’re asked for by the proponents. I enjoined two legal cases that were already underway.”

Meantime, Morneau says Ottawa would also step in financially if Kinder Morgan decides to walk away from the project as it threatened to last month. Should that happen, he believes many other investors may be interested in taking it over.

“Especially knowing the federal government believes it’s in the best interest of Canadians, and is willing to provide indemnity to make sure that it gets done,” he tells reporters, adding the federal government is striving to reach an agreement by the May 31st deadline.

He says the project is in the “best national interest”, and says the feds are “supportive and appreciative of the leadership shown by Premier [Rachel] Notley.”

“[She] has been a tireless advocate for this project and for the people of Alberta,” Morneau adds.

“This project will provide a safe and efficient means of getting our natural resources to international markets, where we know we can get a better price for them. By getting this project done, governments across Canada — the federal government, as well as governments in British Columbia and Alberta, and for that matter, provinces across the country — would have more to invest in the vital services that Canadians depend on to get ahead. So that’s what’s at stake. That’s what we’re working hard to protect on behalf of Canadians.”

He would not go into detail when it came to what exactly the feds are willing to pay in terms of compensation.

“What I can tell you is that this is an exceptional situation. What I can also tell you is we see this as a commercially viable project. We are going to ensure that the project goes forward, creates the jobs that we know it can create, and at the same time do it in a way that’s financially responsible.”

Disputes began when the BC government announced it would temporarily restrict increases in diluted bitumen shipments earlier this year.

Morneau’s talks with Kinder Morgan had their genesis a month ago, when Prime Minister Justin Trudeau promised to deploy both financial and legislative tools to ensure the disputed expansion is able to proceed.

During a remarkable eight-hour stopover in the national capital, an unscheduled break from a busy overseas travel itinerary, Trudeau convened a summit in Ottawa with Horgan, who has staked his government’s survival on opposing the pipeline, and Notley, whose province’s economic health depends on it.

Trudeau instructed Morneau to sit down with Kinder Morgan to find a financial solution that would soothe their investors. He also promised legislation that would reaffirm Ottawa’s authority to press ahead with a development deemed to be in Canada’s national interest.

The Liberal government position is that it approved the project in 2016 after a rejigged environmental assessment and Indigenous consultation process, and in concert with the its climate change and oceans protection plan. Approval came in consultation with the previous BC Liberal government, which gave its consent to the project after its own conditions were met.

Horgan’s election last year changed that. His minority government exists at the pleasure of the Green party, and on condition of his continued opposition to the project.

Kinder Morgan has halted all non-essential spending on the project amid opposition from the BC government and gave Ottawa until the end of this month to broker some calm.

Kinder Morgan CEO ‘appreciates’ offer

The CEO of Kinder Morgan Canada Ltd. says he “appreciates” Morneau’s announcement that the federal government will compensate investors in the proposed Trans Mountain pipeline expansion if “unnecessary delays” cause costs to rise.

Steven Kean offered no further comment during his remarks and declined to talk to reporters after his company’s first annual general meeting on Tuesday since being spun off by US-based Kinder Morgan Inc. to hold most of its Canadian assets a year ago.

Last month, the company said it would stop all non-essential spending on the expansion project to triple the amount of oil flowing from Alberta to the West Coast, which Alberta says is critical to reduce discounts on its product due mainly to pipeline bottlenecks.

Kean reiterated that construction won’t be restarted unless there are sufficient assurances by the end of this month that it can proceed.

Outside the meeting in downtown Calgary, about 50 vocal pipeline supporters armed with signs and slogans assembled on the sidewalk, chanting as passing cars honked their horns.

Picketers Mike Owens and Derek B. Cooper say they were unimpressed with Morneau’s announcement, adding it offers further proof that the Liberal government has done too little to make sure the pipeline wins approval.

Picket organizer James Robson of the Canada Action Coalition says the government shouldn’t have to offer money to make sure an approved pipeline will be built.