Trans Mountain pipeline purchase puts economy before environment, observers say

Finance minister Bill Morneau has said that he is prepared for Ottawa to own the pipeline in the interim, and that the project is being marketed to potential future buyers. 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.

Alberta Premier Rachel Notley says she sees no immediate need to turn off the oil taps to British Columbia now that the federal government is taking over the Trans Mountain pipeline expansion.

Morneau had said the federal government would cover any cost overruns caused by B.C.’s actions, but the company felt that wasn’t enough.

The Prime Minister faced harsh criticism from environmental groups and Indigenous leaders, who gathered outside Science World in Vancouver on Tuesday.

“This is a bad day for British Columbia, because John Horgan has made a decision to kick the feds in the shins and now they’re coming back with our tax dollars to fix the problem”, he said. She said she predicts the price tag will make the assets a tough sell for Ottawa should the feds look to unload the project back into the private market.

Now the Canadian government is stepping in to make sure the pipeline is completed over the objections of environmentalists, especially those in the Vancouver area who are anxious about increased shipping traffic and the possibility of spills along the coast. Warren Mabee, director of the Queen’s Institute for Energy and Environmental Policy, expects citizens concerned about the environment to respond “strongly” to the government’s purchase.

“But the fact that our federal government had to step in proves there’s still deep uncertainty around investing in Canada”.

The purchase, for 4.5 billion Canadian dollars, ensures that the Trans Mountain pipeline, which carries oil from Alberta to a port in a suburb of Vancouver, British Columbia, will begin a planned expansion this summer.

“This is an extremely sad day for Canadian taxpayers”, Conservative Leader Andrew Scheer said during question period.

“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.

Kinder Morgan Canada shares initially jumped as much as 8.5 percent before ending down 3 percent, while the broader Canada share index fell 0.6 percent.

“The only difference now is Canadians might be on the hook for this old legacy pipeline which just leaked, as we know, on Sunday”, he said.

TransCanada spokesman Grady Semmens said in an e-mailed statement that the company isn’t involved in discussions about the Trans Mountain pipeline, and that it won’t comment further about speculation on the project.

In response, Notley temporarily banned B.C. wine, then hit the road to build public support for the pipeline.

Indemnification means the federal government would legally agree to bear any financial losses incurred by Kinder Morgan because of yet to be defined “politically motivated delays”. Those costs would be covered either directly or indirectly through reimbursement by the Canadian taxpayer. “All they were really asking for was certainty that they could proceed with building the pipeline”.

Tuesday’s energy deal comes after the Trans Mountain expansion went through a gruelling 29-month regulatory review.