The battle lines are set. And the clock is now ticking. In the next six weeks the fate of Kinder Morgan’s highly controversial Trans Mountain pipeline, will be sealed.
On the one side are the Federal Government of Canada, the Government of Alberta, the oil industry and many in Canada’s business community. They support building the pipeline which will triple the amount of dirty tar sands that will flow from Alberta to the coast of British Columbia.
On the other are the Government of British Columbia, and the local community, supported by a huge coalition of environmental and indigenous groups, who have been staging a series of mass protests, demonstrations and events against the pipeline. Hundreds of people have been arrested protesting against the pipeline in the last month.
And now the opposition scents victory.
On Sunday, Kinder Morgan sent shock waves across Canada and the oil industry when it announced it was “suspending all non-essential activities and related spending on the Trans Mountain Expansion Project”, until at least May 31.
Until that time, Kinder Morgan “will consult with various stakeholders in an effort to reach agreements”, said the company, in particular “the ability to construct through BC; and, adequate protection” of its shareholders.
The company added: “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”.
It continued: “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. The uncertainty created by BC has not been resolved but instead has escalated into an inter-governmental dispute.”
The company said the British Columbian government needed to end its opposition before it would commit to completing the pipeline.
The reaction to Kinder Morgan’s announcement from the opposition was swift. “Kinder Morgan blinked,” said Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs. “Needless to say, we are ecstatic.”
He added: “In many ways I think this is the first time Kinder Morgan has appreciated the intensity and the reality of the broad-based and deeply entrenched opposition to the Kinder Morgan Trans Mountain pipeline project here in British Columbia.”
Long-term environmental activist, Tzeporah Berman, said that the announcement was the “beginning of the end” for the pipeline. She continued: “Today is a very important day for BC. It shows that when we stand up, and there are moments in history when we have to stand up, that we can change the outcome and ensure the safety of our province and of our coast.”
Yesterday, Kinder Morgan’s chief executives reiterated the company’s plans to abandon the pipeline if it faces any further “roadblocks”, “sparking industry fears the $7.4-billion expansion is close to being shelved”, reported the Globe and Mail.
This is not good for those looking to invest in the pipeline and dirty tar sands which have seen a huge amount of capital flight in recent years. “The Alberta-based industry had already fallen out of favour with global investors, including the world’s biggest energy companies. Now, one of the best hopes for rekindling some of that interest looks increasingly shaky,” Globe and Mail added.
In response to Sunday’s announcement, shares of the company fell more than 12 per cent in Monday’s session on the Toronto Stock Exchange.
But all is not lost for the company.
The news quickly spurred a response from the Federal and Albertan Governments: Albertan Premier, Rachel Notley, said that her government was prepared to do “whatever” it takes to get the pipeline built, including investing in the pipeline. “This pipeline will be built,” she said.
Also on Sunday, Canadian Prime Minister, Justin Trudeau re-iterated much of the same language, tweeting: “Canada is a country of the rule of law, and the federal government will act in the national interest. Access to world markets for Canadian resources is a core national interest. The Trans Mountain expansion will be built.”
His National Resources Minister, James Gordon Carr, added: “The Government of Canada believes that the Trans Mountain Expansion pipeline is in our national interest, which is why we approved the project and why we continue to stand by our decision.”
The Canadian federal and Albertan governments are now said to be “exploring financial support and other rescue options”, due to the fact the troubled pipeline is on “life support.”
But even if they pump cash into the company, someone still has to force the BC Government to change its view. And that does not look likely. The BC Premier, John Horgan, remained resolute: “My views on this have been consistent for the past year”, he said. “We believe the risk is too great and there is no evidence to indicate that that risk has been diminished.”
He added: “I profoundly believe in the rights of British Columbians to stand up and make sure that we’re doing everything we can to protect the interests of our province.”