Canada's Government Buys Controversial Oil Pipeline, To Ensure It Gets Expanded

Quebecers gathered to protest the Kinder Morgan Trans Mountain pipeline in Montreal on Sunday

Canada and Kinder Morgan agreed on a pricetag of 4.5 billion Canadian dollars ($3.5 billion), Finance Minister Bill Morneau said at a press conference Tuesday morning.

British Columbia, the birthplace of Greenpeace, provides critical ocean access to get Canada's landlocked exports out of oil-rich Alberta to new buyers.

This given the court challenges to stop the pipeline by B.C. Premier John Horgan's NDP government and Indigenous opponents, along with protests by environmental radicals who want to kill it at all costs. If none comes forward, only then will Kinder Morgan take Ottawa's $4.5-billion offer to its shareholders.

"Had the federal government, at the first sign of B.C. intransigence - which was months ago now - had they gone to the Supreme Court of Canada for a reference to assert federal jurisdiction, the government wouldn't have to buy a pipeline and use taxpayers' money to do it".

Ottawa could also deploy the police and troops to maintain a barrier between protesters and construction workers.

"Today, we've taken action to create & protect jobs in Alberta and BC, and restart construction on the TMX pipeline expansion, a vital project in the national interest", Trudeau said in a tweet. It does not intend to own the project for long.

Prime Minister Justin Trudeau wanted the Kinder Morgan Trans Mountain pipeline extension built in the worst possible way, and now he's done it.

Green Party leader and MLA for Saanich-Gulf Islands Elizabeth May said Kinder Morgan was "laughing all the way to the bank".

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




"We continue to engage in financial discussions on the way we are going to do that", he said.

Kinder Morgan last month gave Ottawa an ultimatum: Chairman Steve Kean said the company would suspend all work on the expansion project entirely if the legal issues surrounding it can not be resolved by May 31, adding that it would not continue risking shareholder funds on the project unless the clouds over it clear.

Morneau sidestepped questions about how Ottawa will deal with opposition from environmentalists and aboriginal groups, who cite the risk of a catastrophic spill. Two new pipelines were built to the United States under former prime minister Stephen Harper: TransCanada's Keystone pipeline to Nebraska (not to be confused with Keystone XL), and Enbridge's Alberta Clipper to Wisconsin.

"It seems completely insane", May said.

The pipeline has become a flash point for a wider debate in Canada over the environmental impact of tapping Alberta's oil sands, which critics view as a particularly polluting energy source.

Kean did not say why he made a decision to sell rather than absorb the risk of further delays. Here, oil tanks stand near the Trans Mountain pipeline expansion site in Burnaby, British Columbia, in April. "I think that's been reinforced by the fact that Kinder Morgan was able to build up through different open seasons to a high level of commitment (from shippers)", he said. It's actually better for Kinder Morgan than it is for Canada.

"Whether she wins (the election) that's another story, but had this not happened, she was toast", said Bratt, a political scientist at Mount Royal University in Calgary. "I'm concerned there could be catastrophic consequences from a diluted bitumen spill, regardless of the owner of the pipeline", Horgan said.

Trans Mountain stirred an unusual public fight between neighboring provinces.

Alberta is putting up to $2 billion towards construction of the project, and work is underway to get construction going, Premier Rachel Notley said Tuesday. The contribution will convert into equity in the pipeline.

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