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Published: Thu, May 31, 2018
Research | By Jennifer Evans

Canadian Government to Buy Contested Oil Sands Pipeline

Canadian Government to Buy Contested Oil Sands Pipeline

On Tuesday, Federal Finance Minister Bill Morneau announced the $4.5-billion purchase of the Kinder Morgan assets at the Trans Mountain pipeline project.

Berman said the Liberal government "made a very big mistake" by backing Kinder Morgan's project and alienating voters to create "a ideal storm" that would prompt people to take action.

Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic USA pipeline owned by former Enron executives. When the sale is complete, he said, Canada will continue construction on its own, with the aim of eventually selling the project when market conditions would allow the government to get the best price. In the case of the Canadian government's decision to purchase Kinder Morgan's Trans Mountain pipeline, this doesn't change much, at least not for B.C.

Kinder Morgan's future is cloudy and it will be left cash-rich but prospect-poor from the deal to sell its existing 300,000-barrel-per-day pipeline and the delayed 590,000-bpd expansion project for $4.5 billion, analysts at CIBC said in a report. The pipeline would see bitumen from Alberta shipped to the Westridge marine terminal in Burnaby, B.C.

"For sale: Stalled and collapsing pipeline project", reads the title of a Craigslist ad, posted May 29.

"That does not in any way, shape or form, mean that we are not a good place for private investment", she said.

CIBC slashed its 12-month price target to $17 from $22 because of its lower expectations of future growth in revenue and dividends for Kinder Morgan shareholders.

"It's an outrageous and reckless decision by the Canadian government".

The Trans Mountain extension would connect Alberta to British Columbia and triple Kinder Morgan's capacity.

"I think a lot of us who knocked on doors for the Trudeau government really believed them when they said they were going to bring evidence-based analysis and science and democratic process back to pipeline reviews". For those who have soft support for the pipeline but are unimpressed with how Trudeau and Alberta premier Rachel Notley have thrown their weight around to bully B.C. into submission, Horgan appears as a resolute premier standing up for B.C. against the selfish outsiders from Edmonton and Ottawa. "We support improving market access to ensure Canada achieves fair recognition and full value for its energy resources". She adds for now, she doesn't plan to use her province's legislation to regulate the flow of oil exports. But the reference case did not speak to a specific project.

"Weaker economic growth is forecast across the country, with only British Columbia, Prince Edward Island, Ontario and Quebec expected to see growth above 2 per cent this year", said Marie-Christine Bernard, director of provincial forecast for the Conference Board of Canada in a news release Tuesday.

"Prime Minister Justin Trudeau is making a historic mistake in buying the doomed Kinder Morgan project", Adam Scott, senior adviser at Oil Change International (OCI), said in a statement denouncing Trudeau's decision, which comes just weeks after fierce opposition from Indigenous groups and environmentalists forced the oil giant to halt construction operations.

No legislative action is planned at this time, Carr said - noting no legislation is needed to move forward with the proposed commercial transaction. He promised that this project could not go through unless it was done through a vigorous review, which he broke'.

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