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Federal Government to Buy Trans Mountain Pipeline for $4.5-Billion
30 May 2018, 05:40 | Justin Tyler
Canada purchases Trans Mountain pipeline project for $4.5B
The federal Liberal government is spending $4.5 billion to buy Trans Mountain and all of Kinder Morgan Canada's core assets, Finance Minister Bill Morneau said Tuesday as he unveiled the government's long-awaited, big-budget strategy to save the plan to expand the oilsands pipeline.
"Trudeau is gambling billions of Canadian taxpayer dollars on an oil project that will never be built - a project that Kinder Morgan itself has indicated is "untenable" and that faces more than a dozen lawsuits, crumbling economics, and a growing resistance movement that is spreading around the world", Hudema said.
The federal Liberal government has agreed to buy the troubled Trans Mountain expansion project from Kinder Morgan to ensure the controversial expansion of an Alberta-to-B.C. crude oil pipeline gets built.
"We invested in Hibernia, for example", he said.
"This is a betrayal by a government who ran on a hopeful vision for a better future", he said.
Finance Minister Bill Morneau told media that the next step will be to sell it off to the highest bidder once market conditions allow.
Even with all the advance speculation, the Saanich-Gulf Islands MP said she still found this morning's announcement incredible to hear.
Kinder Morgan will proceed on twinning the pipeline while the sale is being finalized.
"The station was quickly isolated and as a precaution, the main Trans Mountain Pipeline was shut down", a statement reads, adding crews started the pipeline just before 3:30 p.m. that day.
Because instead of having the private sector do it, Canadian taxpayers are now the owners of the Trans Mountain, for an initial outlay of $4.5 billion, with the final cost likely to be around $7.5 billion.
The twinning of the 1,150-kilometre-long Trans Mountain pipeline between Strathcona County, near Edmonton, and Burnaby, B.C., will almost triple its capacity to an estimated 890,000 barrels a day and increase traffic off B.C.'s coast from approximately five tankers to 34 tankers a month.
So while Kinder Morgan won't be owning it any more after the purchase closes at the end of July, they'll be supplying the talent to build it, at least in the short term.
While British Columbia has battled the project, Alberta has been a major backer, leading to increasingly testy battles between the two governments and calls for Ottawa to intervene. "Worst of all, the cost and risk of a $7 billion project that was going to be willingly financed entirely by a private company will now be unnecessarily transferred onto the backs of Canadian taxpayers".
Alberta's tarry bitumen, which will always sell at a discount due to its poor quality, can't move through a pipeline without being diluted with costly imported light oils or fracked natural gas liquids from B.C. or the United States.
The crown will use the expertise and management of the employees acquired from Kinder Morgan to get the pipeline built. "They are getting a very good value", said Paul Bloom at Bloom Investment Counsel Inc, which owns about 300,000 shares in Kinder Morgan Canada.
Horgan told reporters in Victoria the federal government's takeover of the project changes the legal situation, but his contentious legal action isn't aimed at any specific project.
Alberta Premier Rachel Notley was much happier about today's announcement, which she showed through a series of tweets throughout the morning.
"He had an opportunity to walk away from pipeline politics and get on with the real work of leading Canada, and the world, in a 100 per cent renewable energy revolution, but instead he's opted to ignore science, Indigenous rights and the voices of people across Canada and bailed out a risky, unwanted pipeline with public money". A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.
Korean general on way to U.S. ahead of summit
Daniel Hoffman is a retired clandestine services officer and former chief of station with the Central Intelligence Agency. His journey to the United States caps a frenetic few days of meetings between North Korean and American officials .