You are using an older browser version. Please use a supported version for the best MSN experience.

Trudeau Seeks Financial Talks With Kinder to Get Pipeline Built

Bloomberg logoBloomberg 4/15/2018 Greg Quinn, Josh Wingrove and Natalie Obiko Pearson
Justin Trudeau wearing a suit and tie© BloombergJustin Trudeau

(Bloomberg) -- Justin Trudeau plans to start financial talks with Kinder Morgan Inc. on the Trans Mountain pipeline after failing to end a spat between provinces that has spiraled into a political crisis and put a vital project at risk.

“We are going to get the pipeline built. It is a project in the national interest,” Trudeau told reporters in a press conference Sunday. He said he’d ordered Finance Minister Bill Morneau, who sat in on Sunday’s meeting with premiers of British Columbia and Alberta, to launch formal talks with the company to hedge risk over the project. “We will not have the discussions in public but this project will go ahead." Trudeau also said he was preparing legislation to underscore federal jurisdiction over the project.

The prime minister, after flying back to Canada from Peru to seek to end the impasse, wasn’t able to dissuade British Columbia Premier John Horgan from his fight against the C$7.4 billion ($5.9 billion) expansion of the Trans Mountain line linking Alberta’s oil sands to the neighboring province’s Pacific Coast. Horgan said they continue to disagree on energy and will proceed with a court battle against the project.

“My obligation is to the people of B.C., and I will defend that until I am no longer premier,” Horgan said Sunday after meeting in Ottawa with the Canadian prime minister and Alberta Premier Rachel Notley.

The dispute has become one of Trudeau’s biggest challenges since winning a 2015 election promising to advance major energy projects while also protecting the environment. Canada could lose tens of billions of dollars if new routes to overseas markets aren’t developed to shrink a discount on crude from landlocked Alberta.

“In the absence of a swift resolution to this issue, foreign and domestic investors will be left to question whether Canada is a suitable place to invest, create jobs and grow their businesses,” John Manley, president and chief executive officer of the Business Council of Canada, said in a statement Thursday.

Halted Work

Kinder Morgan halted work on Trans Mountain a week ago and set a May 31 deadline for a resolution, after Horgan’s government said it was considering a fresh legal challenge. Notley has suggested her province buy a stake to get the project moving, while threatening to cut crude supplies to British Columbia in retaliation.

a boat parked on the side of a building: A contractor enters a building at the Kinder Morgan Trans Mountain pipeline expansion site.© BloombergA contractor enters a building at the Kinder Morgan Trans Mountain pipeline expansion site.

Following the meeting, Notley said financial arrangements are being discussed with Kinder and that she’s confident the May 31 deadline will be met.

Horgan, who argues the risk of a spill in waters off Vancouver is too great, has rejected evidence he has little legal power to block a federally approved project.

Trudeau and his cabinet ministers have all said the project will get built. Expanding Trans Mountain -- in operation since 1953 -- would move an additional 590,000 barrels a day from Alberta’s oil sands to a terminal near Vancouver.

Pipeline Bottleneck

Canada’s oil production growth could surpass pipeline capacity by the mid-2020s, according to the Canadian Association of Petroleum Producers. An outage on TransCanada Corp.’s Keystone system last year sent Western Canada Select crude’s discount to West Texas Intermediate to the widest in four years.

Read more about Canada’s alternatives to Trans Mountain

Politically, the dispute pits New Democratic Party governments in Alberta and British Columbia against each other. Horgan campaigned against Trans Mountain and, to pass major legislation, his government relies on three Green Party lawmakers who have taken an even harder line against Kinder Morgan. At the federal level, Trudeau’s Liberals hold 18 of 42 districts in B.C., followed by 14 for the NDP.

The saga has had some passionate moments, with Alberta temporarily banning wine from B.C. earlier this year. Trudeau, who speaks glowingly of his family’s ties to Canada’s west coast, in February was repeatedly shouted down at a town hall there by pipeline opponents and asked police to remove hecklers. Elizabeth May, a federal Green Party lawmaker, is among people who have been arrested for demonstrating around pipeline work sites.

--With assistance from Kevin Orland and Robert Tuttle

To contact the reporters on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net, Josh Wingrove in Ottawa at jwingrove4@bloomberg.net, Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.net.

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Carlos Caminada, Bernard Kohn

©2018 Bloomberg L.P.

AdChoices
AdChoices
AdChoices
image beaconimage beaconimage beacon