Canada / Regulatory / Shale Daily / NGI All News Access

Trans Mountain Settlement Not in Sight as Trudeau Meets with Alberta, BC Premiers

Talks on restarting Kinder Morgan Canada Ltd.’s (KML) politically stalled Trans Mountain Pipeline expansion started Sunday with no sign of a quick or speedy settlement between the feuding federal, Alberta and British Columbia (BC) governments.

After spending C$1.1 billion ($880 million) on five years of groping through a regulatory, legal and political maze without finding a clear path into construction, KML suspended work earlier this month on its Trans Mountain expansion.

Prime Minister Pierre Trudeau, Alberta Premier Rachel Notley and BC Premier John Horgan only promised further discussions after they emerged from a meeting behind closed doors in Ottawa. The trio confirmed they remain far apart.

Horgan came out of the discussions still claiming duties and powers to protect aboriginal rights and the environment by stopping TransMountain.

Trudeau and Notley still insist BC has no such authority because the project is under federal jurisdiction alone, and its conditional approvals by the National Energy Board and the federal cabinet plus enhanced environmental programs cover BC’s concerns.

Trudeau and Notley also repeated offers of financial and legislative support for the C$7.4 billion ($5.9 billion) plan to triple capacity to 890,000 b/d on the line from the Alberta oilsands to a tanker dock on BC’s Pacific coast at Vancouver.

Neither the prime minister nor the Alberta premier elaborated on the potential aid. The offers are widely interpreted as willingness to provide risk-sharing financial assistance at least, and at most a partial or outright government takeover of the project’s ownership.

Trudeau and Notley both call the Trans Mountain expansion a “strategic” diversification of Canadian exports beyond the United States.

KML has not asked for public money during the expansion project’s five-year regulatory ordeal. The Alberta and federal offers surfaced after the company announced a week ago that construction was suspended and would be cancelled unless the jurisdictional duel is settled by May 31.

Following the Ottawa political talks, KML issued a brief statement indicating the company is braced for much more of the same for weeks to come.

“Our objectives are to obtain certainty with respect to the ability to construct through BC and for the protection of our shareholders in order to build the Trans Mountain expansion project,” said KML management.

“As we said last week, we do not intend to issue updates or further disclosures on the status of consultations until we’ve reached a sufficiently definitive agreement on or before May 31 that satisfies our objectives.”

Another salvo is scheduled to heat up the political front this week. Notley has declared intentions to assert Alberta’s constitutional resource ownership and production authority by introducing legislation that would enable a punitive oil and gas supply boycott against BC if obstruction of the Trans Mountain expansion continues.

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