Five Things: the next steps for getting the Trans Mountain project done

Five Things: the next steps for getting the Trans Mountain project done

Five Things: the next steps for getting the Trans Mountain project done

The Federal government has reached an agreement with Kinder Morgan to buy the Trans Mountain pipeline & related infrastructure for $4.5-billion.

Certainly for Texas-based Kinder Morgan, the pipeline's current owner, Tuesday's announcement is good news. Finance Minister Bill Morneau told media that the next step will be to sell it off to the highest bidder once market conditions allow. During or following construction of the expanded pipeline, which is expected to take about 2.5 years to complete, Canada will monitor the markets and seek out future investors interested in taking on the entire project once it is done.

"We are purchasing the assets; we are purchasing the existing assets, and the investment in the twinning of that pipeline, and those assets are what is required for us to move forward with the expansion", he said.

The plan - similar to how Canada financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis - will include a new Crown corporation to manage the project. Canada has announced it will purchase the Trans Mountain pipeline from developer Kinder Morgan to ensure it is completed.

"Tens of thousands of B.C.jobs depend on pristine coastal and inland waters", said Horgan.

But even if the Keystone XL pipeline is built, Canada is still selling 99% of its oil to refineries in the USA and that narrow market means they now get far less per barrel than they would if they had access to an alternative market.

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The Trans Mountain project is created to increase capacity of the 65-year-old pipeline from Edmonton, Alberta, to Burnaby, B.C., from 300,000 to 890,000 barrels per day. "I'm concerned there could be catastrophic consequences from a diluted bitumen spill, regardless of the owner of the pipeline", Horgan said.

Morneau said Indigenous groups, pension funds, and others have expressed interest in the project.

"I feel betrayed", one woman said, adding that she wasn't sure how it was anyone in Ottawa's business what happens in B.C. on our coastline.

The federal Liberal government has agreed to buy the troubled Trans Mountain expansion project from Kinder Morgan to ensure the controversial expansion of an Alberta-to-B.C. crude oil pipeline gets built. "It polarized us. That is not who we are", Carr told the news conference. He said that shareholders would receive a "fair price" for the assets. If taxpayer dollars are going to be used to support Alberta's flagging oil sands industry (and the province has paid enough in equalization payments to deserve getting something back in return), why not use it in a way that brings them and other Canadians the greatest net benefits?

Canada's oil sector has been stung in the past year as foreign energy companies retreated amid concerns about the environmental toll, high production costs and a risky regulatory regime. Ottawa is deluding itself if it thinks there will be any stronger commercial interest in the project down the road than there is now.

The move is a calculated political risk for Prime Minister Justin Trudeau, who has embraced the Paris environmental accord and the need for Canada to fight climate change.

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