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Texas-based energy giant Kinder Morgan is appealing to Ottawa to take “preemptive action” to force British Columbia to stand down in its intent to oppose the building of a major oil pipeline.
The multinational energy company behind the Trans Mountain expansion project announced on Sunday that it was suspending all non-essential spending on the expansion, and gave a deadline of May 31 before it walks away.
That decision came a day after a protest by Indigenous leaders and environmental activists resulted in a suspension of activities. Close to 200 people have been arrested at a Kinder Morgan terminal in Burnaby, B.C.
In a conference call with financial outlets Monday morning, Kinder Morgan said it was up to Prime Minister Justin Trudeau's government to break the impasse created by B.C. Premier John Horgan's NDP government, which has pledged to use all legal tools available to block the pipeline.
“We are at a point where our spending would need to increase significantly, in order to get full construction activity,” said Kinder Morgan's chairman and chief executive officer Steve Kean.
“The need for certainty becomes acute at this stage. Full construction would reach $200-$300 million a month. That level is unsupportable unless we are confident that we can finish what we start.”
The B.C. premier is pursuing a reference case in the courts to determine if his government can control the shipment of oil through the province on environmental grounds.
There is also another legal challenge in the Federal Court of Appeal, where the federal government’s approval and B.C.’s environmental assessment certificate for the project are being challenged. This case would review whether the federal government fulfilled its legal duty to consult affected First Nations.
Kean said B.C. has taken advantage of its “shared jurisdiction” with the federal government in certain areas to oppose the pipeline. “There is considerable power behind a federally-approved undertaking, particularly a pipeline project, which is what this is. But it’s not exclusive,” said Kean.
“In this case we have a provincial government that has those bits of shared jurisdiction who has been vocal in their intent to use them to regulate the project, and to frustrate the project, and oppose the project. And that’s a different dynamic.”
The firm is now looking for “final clarity,” he said, in the form of “some kind of preemptive action” from Ottawa that stops B.C. from wielding its jurisdictional authority “and reaffirms the project’s entitlement to proceed.”
Founder and executive chairman Rich Kinder also made opening remarks, underlying the company's firm belief in its actions.
“Let me just say, that we strongly believe that the decision announced in our release yesterday afternoon is the correct and appropriate economic decision from the standpoint of both the shareholders of KML (Kinder Morgan Canada) and the shareholders of KMI (Kinder Morgan)," said Kinder.
This isn't the first time Kinder Morgan has warned about the termination of the Trans Mountain project. In October, it filed legal papers with the National Energy Board warning that it was facing massive losses and a potential project failure due to delays in getting municipal and provincial permits. However, Kean had told investors, at that time, that the company was making progress with the B.C. government, getting hundreds of permits out of about 1,000 required to proceed with construction.
"I think the other message there... is that, you know, the bureaucracies and the statutory authorities of B.C. have continued to do their work," Kean said, during an amicable Oct. 18 conference call with investors. "We don't yet see any evidence of any political interference."
Clayton Thomas-Müller, a Mathias Colomb Cree Nation member from Manitoba and campaigner with environmental group 350.org, said in a message posted on Twitter on Monday that Kinder Morgan's maneuvers were designed to push Trudeau, Natural Resources Minister Jim Carr and Alberta Premier Rachel Notley "to do their dirty work."
Kinder Morgan open to discussing Alberta investment in pipeline
The company’s announcement Sunday garnered swift condemnation of Horgan by Notley's NDP government in Alberta, where the premier threatened new legislation to punish B.C. and said she would consider investing public funds to take a new ownership stake in the Trans Mountain project.
"You can speculate as to the kinds of options that the federal government has. They’ve been using a lot of carrots with the B.C. government. At a certain point, maybe the stick ought to come into play," she told reporters Sunday.
Federal Minister Carr, who gave a separate statement April 8 on Parliament Hill in Ottawa, said the prime minister has made it clear that the federal government is looking at "all options" to get the pipeline built.
“This is no time for any provincial government to be reckless with the financial well-being of Canadians and for the fabric of the federation itself," Carr said on Parliament Hill.
"There’s only one Government of Canada, and the Canadian government reminds Canadians again that this pipeline was approved in Canada’s interests, because of the jobs that it creates, because of the better price we’ll get for our resources, because of the expansion of our export markets. Ninety-nine per cent of our exports in oil and gas go to one country, the United States. This pipeline will open up the Asian market.”
Good Morning #MotherEarth! Yesterday demonstrates #KinderMorgan’s intention to push @JustinTrudeau and his Pipeline Czar, @jimcarr_wpg along with @RachelNotley to do their dirty work. Now begins the ditch fight. #StopKM #Cndpoli #ProtectTheInlet pic.twitter.com/iqm7hYjShZ— Clayton ThomasMüller (@CreeClayton) April 9, 2018
Horgan, however, has been undeterred by the pressure, saying in his own statement Sunday that “we will always stand up for British Columbians, our environment and the thousands of jobs that depend on our coast.”
Kean said Kinder Morgan was open to discussing Alberta’s potential investment in the pipeline if there’s clear assurance that the project can actually be completed.
“There have been some discussions. I’m not really in a position where we can talk about those specifically... Let’s be clear on that,” he said. “There’s no magic formulation that’s been articulated by anyone, to us. This is what we’ll be devoting some attention to in the coming weeks.”
As a private-sector company, Kinder Morgan can’t dictate what governments do or establish the timing but it can take actions to protect its shareholders, Kean said.
- with files from The Canadian Press