Kinder Morgan puts brakes on ‘non-essential’ Trans Mountain activities

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Kinder Morgan is suspending “non-essential activities” and related spending for the Trans Mountain pipeline project, citing ongoing opposition from the British Columbia government.

“In the current environment, we will not put [Kinder Morgan] shareholders at risk on the remaining project spend,” Steve Kean, Kinder Morgan’s chair and chief executive officer, said in a press release Sunday afternoon.

The company said it will, however, consult with stakeholders in an effort to reach agreements before May 31 that could allow the pipeline project to proceed.

The pipeline project has support from the federal government, as well as the provincial governments in Alberta and Saskatchewan.

On a swing through western Canada this week, Prime Minister Justin Trudeau repeatedly cited his government’s backing of the pipeline.

The company said that the active opposition from B.C. and its premier John Horgan is not something it can deal with and it needs to take action to protect its shareholders.

A statement from federal Natural Resources Minister Jim Carr on Sunday urged the B.C. government to “end all threats of delay” to the pipeline expansion.

“His government’s actions stand to harm the entire Canadian economy. At a time of great global trade uncertainly, the importance of Canada’s role in the global energy market is bigger than individual projects and provinces.”

“A company cannot resolve differences between governments,” Kean said.  

“While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments.”

The project would see the pipeline’s capacity more than doubled to help ship bitumen from the oilsands to the West Coast for shipping.

It has faced intense opposition in British Columbia and has been tied up in the regulatory system and the courts for years.

The project has also led to threats of a trade war between B.C. and Alberta, and there have been ongoing protests on the West Coast, particularly in Burnaby.

Alberta Premier Rachel Notley will be responding to Kinder Morgan’s decision later this afternoon. She had been expected to travel to New York Sunday as part of her push to get the Trans Mountain pipeline built, but that leg of the trip has now been cancelled, said Notley’s press secretary Cheryl Oates.

In the news release, Kean said that the company could potentially be “risking billions of dollars on an outcome that is outside of our control,” a situation that is not financially acceptable.

The company has entered 2018 with a focus on advancing the permitting process until it achieved clarity on permits, approvals and judicial reviews.

But that isn’t how things are turning out, Kean said.

“The project is now facing unquantifiable risk,” Kean stated.

“Unfortunately, B.C. has now been asserting broad jurisdiction and reiterating its intention to use that jurisdiction to stop the project … Those actions have created even greater, and growing, uncertainty with respect to the regulatory landscape facing the project.”

Mike Hudema, Greenpeace’s climate and energy campaigner, said Kinder Morgan’s action is a signal of what’s to come.

“The writing is on the wall, and even Kinder Morgan can read it. Investors should note that the opposition to this project is strong, deep and gets bigger by the day,” Hudema told CBC News. 

“We encourage Kinder Morgan to shelve this project before the litany of lawsuits, crumbling economics, and the growing resistance does it for them.”



Source

Business News

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