Trans Mountain pipeline project purchase ‘major step forward’: Rachel Notley

Trans Mountain pipeline project purchase ‘major step forward’: Rachel Notley

While in Alberta's case the goal is getting oil to tidewater, in Newfoundland and Labrador it's removing barriers to offshore oil and gas development.

Horgan says the federal government's decision to take over the pipeline from Kinder Morgan doesn't change his government's position and it will proceed with its reference case to the B.C. Court of Appeal.

Finance Minister Bill Morneau believes Canada's authority to build the pipeline will be able to overcome any resistance, be it from protesters or the B.C. government.

The sale does not include the Cochin pipeline, crude storage facilities in Edmonton, or the Vancouver Wharves terminal facility, and the company has not yet decided what to do with the proceeds beyond paying down a roughly $100 million debt.

Steve Kean, chairman and chief executive of Kinder Morgan Canada Ltd., said the deal represents the best opportunity to complete the expansion project.

Among the reasons the company cited when it threatened to walk away in April was inordinate permit delays by the city of Burnaby, where the pipeline ends.

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.

But even if the Keystone XL pipeline is built, Canada is still selling 99% of its oil to refineries in the USA and that narrow market means they now get far less per barrel than they would if they had access to an alternative market. But the math isn't complicated.

Which brings the investment by Canadian taxpayers of $12 billion, which Morneau pointed out would not be carried as debt, but as assets in the "ownership of a crown corporation".

If Canada indeed ends up buying the pipeline, it will be exclusively to ensure its capacity can be tripled, allowing Canada to find new export markets for its oil resources, Morneau said - and that ultimately, the long-term goal will be to find a private-sector buyer to take it over.

But the story gets worse for Canadian taxpayers.

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Nothing for the time being, other than the certainty that TMX will finally be built. Two new pipelines were built to the United States under former prime minister Stephen Harper: TransCanada's Keystone pipeline to Nebraska (not to be confused with Keystone XL), and Enbridge's Alberta Clipper to Wisconsin.

Morneau said shovels will be in the ground during the current construction season.

"It's the kind of epic disaster of the last century I couldn't imagine a modern government doing, but that's exactly what we are doing", May said. The sale is expected to close in the second half of the year.

"Today we take a major step forward for Albertans and for all Canadians", said Notley. "We invested in General Motors".

During the call, Trudeau acknowledged Alberta's "commitment to get the job done".

As for GM, Ottawa and Ontario bailed out the Canadian auto industry in the great recession of 2008-09. When they sold, they received $10 billion for their shares at a loss of $3.7 billion.

He said his company had agreed to work with the government to try to find a third party to buy the assets by July 22.

As for legal challenges, Morneau was clearly confident Ottawa was acting within federal jurisdiction.

News that the federal government is buying the pipeline surprised Martin Tallett, president of Massachusetts-based oil market research firm EnSys Energy. That's a slam dunk in any court.

The more raw bitumen Alberta mines, the more pipelines it needs and the more diluent it must import to move that raw bitumen.

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