Canadian Government to Buy Contested Oil Sands Pipeline

Olive Hawkins
May 31, 2018

Following the news Tuesday morning that the Canadian government has purchased the controversial Kinder Morgan Trans Mountain pipeline for a whopping $4.5 billion, Castanet hit the streets to find out how Okanagan residents feel about it.

Kinder Morgan investors must still approve the sale, which is scheduled to close in August, but the deal will allow construction to resume immediately, the minister added.

"Canada's purchase of a tar sands pipeline and expansion project eviscerates any claim it has to climate leadership at a key moment - doubling down on the world's dirtiest oil, rather than closing the gap on the country's Paris climate commitments", said Anthony Swift, the Canada program director for the US -based Natural Resources Defense Council, in a statement.

Ottawa's decision to nationalize the Trans Mountain pipeline project and get the bulldozers rolling this summer has transformed the opposition on B.C.'s coast: The fight is no longer with a Texas oil giant - this is now Justin Trudeau's pipeline.

Finance Minister Bill Morneau said the government would acquire the troubled pipeline expansion project on Tuesday. The purchase will see Canada buy the existing pipeline, the Westridge marine terminal in Burnaby, B.C., as well as pumping stations and rights of way along the routes.

Speculation about what Ottawa would do to save the embattled project and protect its corporate progenitor has been rampant for weeks, especially as it became increasingly clear that Kinder Morgan wanted out.

"Whether she wins (the election) that's another story, but had this not happened, she was toast", said Bratt, a political scientist at Mount Royal University in Calgary.

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Opponents see Kinder Morgan's decision to sell the pipeline as a victory of sorts, claiming that their grassroots opposition has chased away private investors.

The extraordinary move by the Canadian government to push ahead with the crucial pipeline has drawn strong reactions from across the country.

"We need to deal with the political uncertainty", he said. "This is an opportunity for our young families to get training and jobs, to build homes and careers", said Chief Ernie Crey of the Cheam First Nation.

"The federal government has reached an agreement with Kinder Morgan to buy the Trans Mountain pipeline and the infrastructure related to the project,"said Morneau".

The Alberta government has agreed to cover any unexpected costs that arise during construction.

The Houston-based company had stopped all non-essential spending on the project last month after facing broad opposition from environmental groups, indigenous communities, and the province of British Columbia. The overwhelming majority of Canada's oil exports are sold to American refiners at a discount to global benchmarks, reducing fuel prices for American consumers and income for Canadian producers.

The Alberta government also has pledged a contingency fund of up to about $1.5 billion to provide emergency funds to the project if unforeseen circumstances arise. He promised that this project could not go through unless it was done through a vigorous review, which he broke'. He insists there is no contradiction between fighting for the environment and defending Canada's oil industry and the economic benefits it brings. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.

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