In a move reminiscent to what TransCanada did a month before it put the kybosh on the Energy East Pipeline Project, Kinder Morgan put out a press release Sunday, April 8, in which the company said it would curtail spending on the project if things didn鈥檛 change with the Province of British Columbia, essentially immediately.
That press release brought swift response from the premiers of Alberta and British Columbia, as well as Jason Kenney, Alberta鈥檚 leader of the opposition who is in strong contention in that province鈥檚 next provincial election. The reaction from both Alberta鈥檚 premier and leader of opposition indicate that province is ready to go to economic war to make sure that pipeline is built, including going so far as taking a stake in the pipeline.
First off, the press release from Kinder Morgan announced that it is suspending all non-essential activities and related spending on the Trans Mountain Expansion Project. KML also announced that under current circumstances, specifically including the continued actions in opposition to the project by the Province of聽British Columbia, it will not commit additional shareholder resources to the project. However, KML will consult with various stakeholders in an effort to reach agreements by聽May 31st聽that may allow the project to proceed. The focus in those consultations will be on two principles: clarity on the path forward, particularly with respect to the ability to construct through B.C.; and, adequate protection of KML shareholders.鈥�
鈥淎s KML has repeatedly stated, we will be judicious in our use of shareholder funds. In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend,鈥� said KML chairman and chief executive officer聽Steve Kean. The project has the support of the Federal Government and the Provinces of聽Alberta聽and聽Saskatchewan聽but faces continued active opposition from the government of聽British Columbia.
鈥淎 company cannot resolve differences between governments. 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,鈥� added Kean.
Notley responds
Alberta Premier Rachel Notley directly tackled British Columbia Premier John Horgan鈥檚 actions on the pipeline, saying she would bring in legislation to impose serious economic consequences on B.C. in short order. She added that Horgan had been harassing the managers and investors of Kinder Morgan.
鈥淭hey cannot mess with Alberta,鈥� Notley said. To that end, she said Alberta was prepared to become an investor in the pipeline.
"If we take that step, we will be a significantly more determined investor than B.C. has dealt with up to this point," she said.
Horgan campaigned on it
B.C. Premier John Horgan, in talking to reporters in Victoria, said that he had just spoken to both Ian Anderson, of Kinder Morgan Canada, and Prime Minister Justin Trudeau on the phone.
Horgan said that Anderson told him the project was unnecessarily harassed by the Province of British Columbia. Horgan disagreed, and pointed out that he had campaigned on opposition to this pipeline with a consistent message. 鈥淲e believe, of the Government of British Columbia is to defend our water, our lands and, most importantly, our coast,鈥� Horgan told reporters.
Horgan said he also disagreed with the prime minister, telling him that the National Energy Board process was flawed and that he would carry on with the court reference.
Horgan took exception to Alberta鈥檚 strong words regarding the Kinder Morgan project, implying the cancellation of other major export pipeline projects was no big deal.
鈥淭he Energy East Pipeline was stopped and there was no consequence of that,鈥� he said, adding a similar thing was the case with the Keystone XL, although he acknowledged that project may yet go ahead.
Feds speak up
While Horgan said there had been no threats from the prime minister in his phone call, federal Natural Resources Minister Jim Carr said in a statement, 鈥淭he Government of Canada believes that the Trans Mountain Expansion pipeline is in our national interest, which is why we approved the project and why we continue to stand by our decision.鈥�
To that end
He called on Premier Horgan and the B.C. government to end all threats of delay to the Trans Mountain Expansion.
鈥淥ur government stands behind this project and has the jurisdiction in this matter. Under Canadian constitutional law, this is well-established and clear and has been reaffirmed by multiple courts, including the Supreme Court of Canada.
鈥淲e are determined to find a solution. With all our partners, we continue to consider all available options. As our Prime Minister has said, this pipeline will be built,鈥� Carr concluded.
Saskatchewan
As for a Saskatchewan response, the afternoon of the Kinder Morgan announcement coincided with the gathering of Premier Scott Moe and Prime Minister Justin Trudeau at the vigil held in Humboldt in memory of those killed and injured in a horrific bus/semi crash on April 6 involving the Humboldt Broncos junior A hockey team.
While Saskatchewan oil will not flow through Kinder Morgan鈥檚 Trans Mountain Expansion Pipeline, Moe told Pipeline News in mid-March that it will have a substantial impact on the heavy oil price differential, and that, in turn, impacts Saskatchewan鈥檚 finances to the tune of $150 million per year. Additionally, the pipe to be used for the project was to be sourced from EVRAZ steel in Regina, with 1,000 jobs impacted there.聽
