Failure to find buyer makes Federal government sole owner of Trans Mountain pipeline

Kinder Morgan sold the Trans Mountain Pipeline to the Government of Canada.

The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer.

Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22.

But with that date set to pass without a deal, it was expected the pipeline company will now take Ottawa’s $4.5-billion offer to purchase the project to its shareholders.

The government had previously indicated that there were numerous groups interested in purchasing the controversial project, including pension funds and Indigenous groups.

Finance Minister Bill Morneau’s spokesman, Daniel Lauzon, said Ottawa still intends to sell the pipeline, if and when a suitable partner is identified and it’s in the best interests of Canadians.

“We have no interest in being a long-term owner of a pipeline, but we will be the temporary caretaker,” Lauzon told The Canadian Press on Sunday. “We won’t rush that.”

News of the failure to find another partner by July 22 came one day after protesters opposed to the Trans Mountain expansion took to Parliament Hill in hazardous-materials suits and carrying a fake pipeline.

It was the latest in a string of such rallies by environmental and Indigenous groups, which also included the erection of a similar cardboard pipeline outside the Canadian High Commission in London in April.

Lauzon on Sunday defended the decision to purchase the pipeline, saying the project, whose aim is to get Canadian oil to Asian markets, remains in the national interest.

The Trans Mountain expansion will build a new pipeline roughly parallel to the existing, 1,150-km line that carries refined and unrefined oil products from the Edmonton area to Burnaby, B.C.

It will nearly triple the line’s capacity to 890,000 barrels a day. Trans Mountain is the only pipeline carrying Alberta crude to the West Coast and the hope is that most of the oil will end up in tankers bound for Asia.

Ottawa approved the expansion project in November 2016 and British Columbia’s then-Liberal government followed suit two months later.

But four months after that, the provincial Liberals were replaced by the NDP under John Horgan, who has a coalition of sorts with the Green party that includes an agreement to oppose the expansion in every way possible.

The federal government has said its hand was forced by Horgan, who has gone to court for judicial approval to regulate what can flow through the pipeline — a measure of opposition that made Kinder Morgan Canada, the project’s original owner, too nervous to continue.

The company halted all non-essential spending on the pipeline expansion in April pending reassurances from Ottawa that the project would come to fruition.

The federal government had said Canada would cover any cost overruns caused by B.C.’s actions, but in the end that wasn’t enough.

Following the government’s announcement that it planned to purchase the pipeline, Kinder Morgan agreed to start construction this summer as planned.

Lee Berthiaume, The Canadian Press

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Spill at Trans Mountain pipeline station in B.C. larger than initially reported

A spill from Kinder Morgan’s Trans Mountain pipeline late last month was 48 times larger than initially reported, officials said.

The spill volume reported from the company’s Darfield station north of Kamloops on May 27 was revised to 4,800 litres from 100 litres, the B.C. Ministry of Environment said Sunday.

It said 100 litres is the minimum threshold under the company’s spill reporting obligations, so that’s why the ministry estimated 100 litres at the time.

Trans Mountain spokeswoman Ali Hounsell said the company didn’t tell regulators how much medium crude oil escaped at the time of the spill.

“Trans Mountain had not provided an estimate of the volume spilled, other than to confirm with regulators that it was over the reportable threshold, until cleanup had sufficiently progressed to a stage where an accurate estimation could be provided,” she said in an e-mail.

Following an on-site investigation, she said Trans Mountain has provided the updated volume estimate to regulators.

Trans Mountain is in the final stages of completing the cleanup, she said.

Under British Columbia’s spill reporting regulation, Trans Mountain was required to report the spill immediately. The regulation says the quantity spilled should be among the information included in that report, “to the extent practical.”

The company turned off the pipeline for several hours the day of the spill, which the ministry said came from a leaking flow metre.

The spill was contained to the station property and no waterways were affected, the ministry said.

Two days later, Prime Minister Justin Trudeau announced the federal government will spend $4.5-billion to buy the Trans Mountain expansion and Kinder Morgan Canada’s core assets.

Kinder Morgan had ceased all non-essential spending on the Trans Mountain expansion in April, vowing to cancel it unless it received assurances it can proceed without delays and without undue risk to shareholders by a deadline of May 31.

After the federal government’s announcement, the company said work would be restarted soon, with the government funding construction. The sale is expected to close in the second half of the year.

The Canadian Press

[SOURCE]

Liberal government to buy Kinder Morgan’s Trans Mountain pipeline for $4.5 billion

Finance Minister Bill Morneau arrives at the National Press Theatre in Ottawa on Tuesday, May 29, 2018.

The Federal Liberal government is spending $4.5 billion to buy the Trans Mountain pipeline from Kinder Morgan.

The deal includes all of Kinder Morgan Canada’s core assets. The purchase ensures that the Trans Mountain pipeline, which carries oil from Alberta to the west coast of British Columbia will begin a planned expansion this summer.

According to CBC News, Finance Minister Bill Morneau announced details of the agreement reached with Kinder Morgan at a news conference with Natural Resources Minister Jim Carr this morning.

Morneau said the project is in the national interest, and proceeding with it will preserve jobs, reassure investors and get resources to world markets. He could not say exactly what additional costs will be incurred by the Canadian public to build the expansion, but suggested a toll paid by oil companies could offset some costs and that there would be a financial return on the investment.

The purchase price does not include the construction costs of the Trans Mountain expansion so the final bill to Canadian taxpayers will be significantly higher once labour and materials are included.

Kinder Morgan had estimated the cost of building the expansion would be $7.4 billion, but Morneau insisted that the project will not have a fiscal impact, or “hit.”

Alberta will also provide emergency funding to cover unforeseen costs.

The government does not intend to be a long-term owner, and at the appropriate time, the government will work with investors to transfer the project and related assets to a new owner or owners.

However, Kinder Morgan will be paid regardless of whether a new suitor is found.

Until then, the pipeline project will proceed under the ownership of a Crown corporation.

The agreement, which must still be approved by Kinder Morgan’s shareholders, is expected to close in August.

Crude oil spill confirmed at Kinder Morgan facility north of Kamloops

The Darfield pump station is about 80 kilometres north of Kamloops, B.C.

100 litres of crude oil leaked at Trans Mountain site in Darfield 

A B.C. Ministry of Environment spokesman confirmed 100 litres of oil was spilled at Kinder Morgan’s Trans Mountain pipeline Darfield facility, just north of Kamloops on Sunday morning.

The oil leaked from a flow metre and was reported to authorities just before 5 a.m.

According to media reports the spill did not leak into any waterways and was completely contained within Trans Mountain’s facility. The leaked product was a medium crude blend.

As a precaution, the main Trans Mountain Pipeline was shut down after the spill.

Trans Mountain officials said following inspections, the pipeline was restarted at about 3:20 p.m.

Neighbours and other stakeholders were notified about the incident.

The spill comes just days before Kinder Morgan’s self-imposed May 31 deadline that would see the Calgary-based company potentially walk away from the project unless the company is given political certainty allowing it to proceed.

Darfield, is a rural community along B.C.’s North Thompson River that’s about 80 kilometres north of Kamloops.

Kinder Morgan Warns of ‘Significant’ Delay After Court Urged to Consider Release of Trudeau Government Secrets

Prime Minister Justin Trudeau arrives at the House of Commons in Ottawa on April 25, 2018 for the daily question period. Photo by Alex Tétreault

This article was originally published by National Observer

A lawyer for energy giant Kinder Morgan is warning that its Trans Mountain expansion project is facing “significant and unwarranted delay” following an unexpected legal letter filed Thursday in the wake of dramatic revelations reported by National Observer about the project’s approval by the Trudeau government.

Maureen Killoran, a Canadian lawyer for the Texas-based company, drafted the warning in a letter filed Friday with the Federal Court of Appeal in response to a request filed on Thursday by the Tsleil-Waututh Nation in B.C..

The Tsleil-Waututh Nation is challenging Prime Minister Justin Trudeau’s approval of the Kinder Morgan project at the Federal Court of Appeal, arguing that the government failed in its legal duty to consult First Nations prior to making its decision. In a letter sent to the court on Thursday, Scott Smith, a lawyer representing the Tsleil-Waututh Nation (TWN), wrote that two recent reports by National Observer confirm allegations it had previously raised that Trudeau’s government acted in “bad faith” and is withholding documents that show what happened during its internal review.

As a result, Smith sent a letter to the court, giving notice that it intended to introduce a motion to compel the Trudeau government to cough up its secret records about the review of the pipeline project.

“It is TWN’s position that such new evidence of bad faith and dishonorable conduct by Canada… would be directly relevant to the Court’s consideration of whether Canada discharged its duty to consult TWN,” Smith wrote in a letter to the court dated April 26.

The request from Smith is unusual, given that the case had already been heard last fall with a decision expected by the court this spring. But Smith argued in his letter that there was a legal precedent for the court to address the new allegations raised in reports from National Observer.

In his submission, Smith cited a report published by National Observer on April 18 that revealed federal officials sped up their timeline for the review of the Trans Mountain project following a phone call from Kinder Morgan Canada’s president Ian Anderson. He also cited a report published by National Observer on April 24 that quoted public servants who said they were instructed to find a way to approve the project during an internal meeting

“In short, it would appear that this evidence, which was not disclosed and in regard to which TWN had no prior knowledge, corroborates TWN’s allegation and suggest, in the words of the relevant media coverage, that internal federal government employees were instructed ‘at least one month before the pipeline was approved, to give cabinet a legally-sound basis to say ‘yes’ to Trans Mountain… at a time when the government claimed it was still consulting in good faith with First Nations and had not yet come to a final decision on the pipeline,” Smith wrote.

The court responded to Smith’s letter promptly, asking the federal government and other stakeholders to provide their responses to the request by the end of the day on Friday.

In her response, Killoran said it was too late.

“Based on information contained in two articles published in the National Observer, TWN now seeks to gather additional evidence more than six months following the close of submissions,” she wrote. “The relief sought by TWN will introduce significant and unwarranted delay.”

Killoran also noted that the Tsleil-Waututh Nation had previously requested the release of documents through a motion that was rejected by the court in June 2017 “because (among other things) it was not persuaded that Canada withheld any information that was required to be produced. The Court also noted that TWN had an opportunity to test Canada’s document production, and/or seek additional documents, on cross examination.

“Finally, there are no exceptional circumstances that justify reopening the evidentiary record for the consolidated proceedings,” Killoran wrote. “On the contrary, it is highly unlikely that the motion will uncover additional producible evidence; even if such evidence exists (which is denied), it has no influence on the outcome of this case.”

Justice Department proposes two-week process to handle Tsleil-Waututh motion

The federal government responded at the end of the day with a statement that didn’t address any of the allegations raised in the National Observer reports directly. It also proposed a two-week process to deal with the motion and responses from the affected parties.

“Canada takes no position on whether TWN ought to be permitted to bring this motion at this late date, over six months after the hearing of these proceedings has concluded,” wrote Jan Brongers, senior general counsel from the B.C. regional office of the federal government’s Justice Department.

“That said, on the basis of the description of the proposed motion set out in the TWN Letter, Canada does not agree that it is the type of ‘urgent motion, such as requests for emergency injunctive relief’ that the Court contemplated would be governed by… the Procedural Order. Rather, the motion appears to constitute a further attempt by TWN to seek supplemental evidence.”

Brongers letter also echoed concerns raised by Kinder Morgan that the motion could lead to more delays.

“Canada notes that TWN’s proposed motion has the potential to delay adjudication of the consolidated proceedings, which, as noted above, have already been under reserve for a considerable time,” Brongers wrote. “Accordingly, Canada submits that if TWN is permitted to bring this motion at this late date, it ought to be filed and served forthwith.”

By Mike De Souza, April 27th 2018

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