Ottawa's planned purchase of pipeline elicits shock, disappointment


Morneau said Ottawa is buying Kinder Morgan's existing pipeline, and the rights and assets associated with the planned expansion, calling $4.5 billion a "fair price" for a project with "significant commercial value". "There is more work to do, but we will not stop until the job is done".

Steve Kean, chairman and chief executive of Kinder Morgan Canada Ltd., said the deal represents the best opportunity to complete the expansion project.

The announcement was made by Canada's finance minister, Bill Morneau, who called the proposed purchase "an investment in Canada's future".

Morneau pointed out that once the pipeline was built, the owners would receive user fees in the form of tolls from the oil companies transporting their product on TMX. "Every year they have to spend more on maintenance to keep it running", added Allan.

The transaction on which the federal government and Kinder Morgan agreed upon on Tuesday is expected to close in August 2018.

On Monday, Prime Minister Justin Trudeau reiterated that his government is "going to get this pipeline built", but offered no news on the matter days before Kinder Morgan's deadline.

It takes a third of a barrel of imported light oil to move one barrel of bitumen through a pipeline. Some First Nations groups have argued they were not adequately consulted by the National Energy Board process to allow this pipeline expansion project to proceed.

On the heels of Trudeau's announcement, the Vancouver-based Indigenous rights group Coast Protectors scheduled a rally for Tuesday evening to "say no to Trudeau's pipeline buy out". It certainly won't cost any less than the almost $7.5 billion Kinder Morgan had allocated for it. "Kinder Morgan has gotten rid of its assets, they are free and clear".

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Ottawa approved the expansion in late 2016 but the project faced permit delays and court challenges in B.C. The issue came to a boil in late January when B.C. Premier John Horgan said his government would seek to limit any extra oil shipments through the province due to concerns over oil spills. Kinder Morgan Canada will continue to own the remaining assets, including crude storage, rail terminals and a condensate pipeline, and look to expand.

"Today we take a major step forward for Albertans and for all Canadians", said Notley.

The industry group representing pipeline operators said it is "pleased" the project is moving forward, but seemed anxious about the implications of a government buyout of a private pipeline project.

"It seems completely insane", May said.

What all this shows is the abject failure of Trudeau's and Notley's superficial and absurd belief that imposing a national carbon price on Canadians would give them the "social licence" to build the Trans Mountain pipeline, with the blessings of B.C.'s anti-oil government, Indigenous objectors and radical environmentalists.

"Canada's purchase of a tar sands pipeline and expansion project eviscerates any claim it has to climate leadership at a key moment - doubling down on the world's dirtiest oil, rather than closing the gap on the country's Paris climate commitments", said Anthony Swift, the Canada program director for the US -based Natural Resources Defense Council, in a statement.

"He had an opportunity to walk away from pipeline politics and get on with the real work of leading Canada, and the world, in a 100 per cent renewable energy revolution, but instead he's opted to ignore science, Indigenous rights and the voices of people across Canada and bailed out a unsafe, unwanted pipeline with public money".

Currently, 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth-largest oil producer's energy exports.