Kinder Morgan halts pipeline work, cites B.C. opposition

Kinder Morgan is halting all “non-essential activities and related spending” on the Trans Mountain pipeline project due to B.C. opposition, it was announced Sunday.

In response, B.C. Premier John Horgan repeated his view that provincial jurisdiction must take precedence, and Alberta Premier Rachel Notley said her province might take an ownership stake in the project.

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The company has said it will take until May 31 to consult with stakeholders to determine whether the project will be permitted to continue construction through B.C. and whether shareholders can be protected.

“As KML has repeatedly stated, we will be judicious in our use of shareholder funds,” said Kinder Morgan chairman and CEO Steve Kean.

“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.”

If the company cannot reach an agreement with the various stakeholders by the May 31 deadline, Kean says it is “difficult to conceive of any scenario in which we would proceed with the project.”

Horgan responded at an afternoon news conference by saying that he had spoken with Kinder Morgan president Ian Anderson and disagreed with his contention that the project has been "unnecessarily harassed" by B.C.

"We campaigned in April of last year with a view to protect and defend our coast, with a view to have economic development take place in a balanced way within British Columbia," he said.

Horgan said he also spoke with Prime Minister Justin Trudeau, who reiterated his belief that the project is in the national interest.

"It is our view that provincial jurisdiction should prevail in many areas that are affected by this process," Horgan said. "We said from the beginning that the national energy process was flawed."

In a separate statement, Horgan said British Columbians expect their government "to stand up for their interests and their coast."

"The federal government failed to consider B.C.'s interests and the risk to our province," he said. "We joined the federal challenge, started by others, to make that point."

He said that thousands of jobs are dependent on B.C.'s coast.

B.C. Green Party Leader Andrew Weaver said his party has always held the view that the pipeline project poses "significant risks" to B.C.'s economy.

"This project should never have been approved," Weaver said in a statement. "It is due to a sad lack of economic and climate leadership that B.C. has been placed in this situation."

He said the entire issue is avoidable.

"The federal government should keep its promises to respect communities and Indigenous people, subject new pipelines to an overhauled [environmental assessment] and to meet our climate targets," Weaver said. "If the prime minister truly wants to claim the mantle of climate leadership, he should stop tying our plan to fossil fuel expansion."

Kean’s statement goes on to note that while the project has support from the federal government and the provinces of Alberta and Saskatchewan, the province of British Columbia and its government have continued to be a barrier to the project’s progress.

“The fact remains that a substantial portion of the project must be constructed through British Columbia, and since the change in government in June 2017, that government has been clear and public in its intention to use ‘every tool in the toolbox’ to stop the project,” said Kean in his statement.

“The uncertainty created by B.C. has not been resolved but instead has escalated into an inter-governmental dispute.”

Kinder Morgan’s Trans Mountain project is set to twin an existing pipeline, tripling the flow of oil flowing to the B.C. coast from Alberta. To date, the company says it has spent about $1.1 billion on the project.

In recent months, Horgan and have had public spats over the future of the pipeline, even throwing in trade threats at one point. The pair have regularly traded jabs in interviews and news conferences, with each declaring victories at various steps of the project.

Notley tweeted that her government would introduce legislation to "impose serious economic consequences on British Columbia if its government continues on its present course."

"Let me be absolutely clear: They cannot mess with Alberta," her tweet read.

In Edmonton, Notley said Alberta would consider taking on an equity stake in the pipeline if Kinder Morgan investors are considering backing away.

"If we have to, Alberta is prepared to do whatever it takes to get this pipeline built," said Notley, without discussing the dollar value of such an investment.

"Alberta is prepared to be an investor."

The RCMP say they have arrested about 200 people demonstrating around the Trans Mountain facilities since mid-March, and while most face charges for civil contempt, officers have also made arrests for mischief, obstruction and assault of a police officer.

Last week, Trudeau made stops in B.C. where he was greeted by anti-pipeline protesters in Victoria and Vancouver.

During the appearances, he said the federal government needs to build a strong economy and protect the environment at the same time, adding that he has faith in his government’s ocean protection and emergency preparedness plans.

“I would not have approved this pipeline had I not been confident of that,” he said.

Kean noted that i was not his company’s role to play referee between the various levels of government.

“A 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,” said Kean.

Kean noted that while KML is a “very good midstream energy company with limited debt,” the uncertainty surrounding the project has prompted the company to “protect the value that KML has, rather than risking billions of dollars.”

Kinder Morgan will host a press conference on Monday morning to speak on its announcement.

- with files from Canadian Press
 

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