Motz not happy about Trans-Mountain pipeline purchase

Motz not happy about Trans-Mountain pipeline purchase

The Canadian government's announcement to buy the Trans Mountain pipeline from Texas oil giant Kinder Morgan sparked protests, questions and confusion among British Columbians.

On Tuesday morning, Finance Minister Bill Morneau announced that the federal government will buy the entire Trans Mountain pipeline, but protestors say this $4.5 billion deal is no big deal.

One man said he thought the project would be profitable for Canada.

Motz also said taxpayers money shouldn't have to be put on the line for a project that has met all federal and environmental requirements. The purchase will be financed by Export Development Canada.

Morneau said the federal government does not plan to be a long-term owner and is in negotiations with interested investors, including Indigenous communities, pension funds and the Alberta government, which will provide funding for any unexpected costs that arise during construction.

The Trans Mountain project is created to increase capacity of the 65-year-old pipeline from Edmonton, Alberta, to Burnaby, B.C., from 300,000 to 890,000 barrels per day.

Bankers are also working on plans to help Trans Mountain win an elusive social license by selling the project to a consortium of public sector pension plans with solid environmental credentials, including the British Columbia Investment Management Corp.

But Morneau said the Alberta-British Columbia feud, which led Alberta to boycott British Columbia wines and threaten to cut the neighbouring provinces fuel supplies, "cannot be allowed to fester".

"We need to deal with the political uncertainty", he said.

Allan, a former business executive who has studied the project's poor economics for seven years, suspects that bitumen shippers using the Trans Mountain expansion project will soon ask the government for lower tolls, and thereby increase the burden on taxpayers even more.

Alberta's oil industry has seen its attempts to have other pipeline projects built sunk by regulatory and political opposition, including cross-border projects such as Keystone XL, still stalled because of opposition in Nebraska and South Dakota.

All of that made Kinder Morgan more than willing to walk away, putting intense pressure on the Canadian government to resolve the dispute.

Mr. Trudeau took the joke in stride, responding that his grandfather owned gas stations, so perhaps it's appropriate his government is dropping $4.5-billion to take over the controversial energy project from Kinder Morgan Inc. The much more ambitious Energy East project was abandoned by TransCanada Corp. amid outcry in Quebec - and no government move to save it.

But opposition in British Columbia threaten to further delay the project, which was approved by the federal government in 2016.

Kinder Morgan had set a Thursday deadline to gain certainty over the project or abandon it altogether.

According to the Pipeline Safety Act, $1 billion in financial assurances for the existing pipeline was in place based on a $500-million parental guarantee from Kinder Morgan. "If anything, we're going to ramp up our demonstration and our movement", George says. Instead, it will sell the controversy-plagued project to Canada.