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Canada to buy Kinder Morgan oil pipeline in bid to save project

Canada to buy Kinder Morgan oil pipeline in bid to save project

"We said we should get the pipeline built and we are getting it built".

The deal needs to be approved by Kinder Morgan shareholders.

On Tuesday, B.C. Premier John Horgan vowed to continue to fight the pipeline in court.

Federal Finance Minister Bill Morneau made the announcement from Ottawa and says the deal represents a sound investment.

Canada's long-term plan is to finance the costs of construction through the paid contracts with oil producers to ship their oil through the pipeline, and recoup its investment through an eventual sale.

Alberta has agreed to put up to $2 billion on the table to cover off any unexpected costs during the sale or construction phases, and will receive equity or profit for any money it does put in. They said more oil-by-rail shipments would be necessary.

Prime Minister Justin Trudeau has long insisted the project is in Canada's national interest and is a pivotal part of the country's economic future.

This despite Obama's hypocritical veto of the Keystone XL pipeline to move Alberta's oil to the U.S. Gulf Coast. The Export Development Bank of Canada will finance the plan and create a Crown corporation to run and manage the pipeline during Canada's ownership period.

First, said Morneau announced "an agreement with Kinder Morgan to purchase the existing Trans Mountain infrastructure related to the TMX project".

While Brad Wall is happy the federal government stepped in to ensure the Trans Mountain extension's construction, he doesn't believe the Liberals needed to buy it. Kean is also CEO of Kinder Morgan, Inc., the Houston-based firm that owns 70 per cent of the Canadian firm.

Morneau couldn't say what additional costs, if any, would be incurred by Canadians in building the pipeline.

But if one isn't found by July 22, Kinder Morgan's stake in the pipeline would be bought out by the Canadian government, which would proceed with the expansion, whose cost has been estimated at about $5.7 billion.

Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic US pipeline owned by former Enron executives.

Peter Milobar, Stone's counterpart in Kamloops-North Thompson, blamed Horgan and Environment Minister George Heyman for causing the impasse that led to the federal government's decision, saying it's time the two "become regulators, and not activists".

"This is a major step forward for all Canadians", tweeted Rachel Notley, the premier of Alberta.

"It's really quite a turnup for the books for the Canadian government to buy itself a pipeline", he said.

The Alberta government responded with a short-lived ban on the import of B.C. wines, and the passing of Bill 12, legislation that would allow the Alberta government to "turn off the taps" for oil imports to B.C. They have also asked the court to reopen its evidentiary record, more than six months after hearings concluded, to consider new evidence uncovered by a National Observer investigation that revealed public servants were instructed to find a way to approve the project before the government had concluded consultations with First Nations.

Kinder Morgan last month gave Ottawa an ultimatum: Chairman Steve Kean said the company would suspend all work on the expansion project entirely if the legal issues surrounding it can not be resolved by May 31, adding that it would not continue risking shareholder funds on the project unless the clouds over it clear.

Bad enough that people like hysterical, anti-pipeline protesters, as Robert Bryce explains in his book Power Hungry, refuse to accept the inescapable reality that, "We use hydrocarbons - coal, oil and natural gas - not because we like them, but because they produce lots of heat energy from small spaces, at prices we can afford in the quantities that we demand".

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