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Fossil Fuels

Published on April 16th, 2018 | by James Ayre

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Canada’s Prime Minister: We’ll Offer Aid To Ensure That Kinder Morgan Trans Mountain Oil Pipeline Expansion Gets Built

April 16th, 2018 by  


The Kinder Morgan Canada Trans Mountain oil pipeline expansion project will go ahead even if the federal government has to offer financial aid, despite strong resistance from the government of British Columbia and activists there, according to Canadian Prime Minister Justin Trudeau.

The comments follow comments from Kinder Morgan Canada execs that the firm may end up walking away from the project if greater clarity isn’t provided about the legal path forward — that being a reference to efforts by the government of the province of British Columbia to block the C$7.4 billion project on environmental grounds.

To explain that a bit more, the idea of the Trans Mountain oil pipeline expansion project is to increase the capacity of the pipeline in question (3 times over), and thereby improve its selling position. As it stands, Canada is mostly dependent upon the USA as an oil buyer because of a lack of pipeline capacity to the Pacific coast — and thus sells much of its crude oil at a discount as compared to the benchmark CLc1. (Much of Canada’s oil is extracted in the inland province of Alberta.)

“Construction will go ahead,” stated Trudeau. “I have instructed the minister of finance to initiate formal financial discussions with Kinder Morgan, the result of which will be to remove the uncertainty overhanging the Trans Mountain pipeline expansion project.”

He then referred to the pipeline expansion as “a vital strategic interest to Canada.”

Trudeau also obliquely referenced earlier talk of the federal government taking a stake in the expansion project (in order to support it), by noting that “we are actively pursuing legislative options that will assert and reinforce the government of Canada’s jurisdiction in this matter.”

The above comments were made to reporters following an emergency summit with the premiers of Alberta and British Columbia that Trudeau took part in.

So, why is the Canadian government now seemingly pursuing what could be considered to be a “bailout” for an oil giant? Reportedly due to: worries that already declining foreign investment levels could fall even further if the expansion project doesn’t go through, and strong pressure from the connected business community.

Informally, I’ll also speculate here that officials representing China have told Canada’s federal government to make sure that the expansion happens. Obviously, I can’t prove such speculation, but “foreign investment” when it comes to Canada largely refers to China, and how much autonomy does Canada even have at this point?

The reality is that Canada is pretty much dependent on foreign investment and on its oil industry for the maintenance of its current way of life. Without both, the country is facing a steep decline in its average standard of living.

Reuters provides a bit more on the immediate situation: “Although Trudeau’s Liberal government could invoke emergency powers to ensure the project goes ahead, that would most likely anger voters in British Columbia and cost the Liberals support in a federal election in October 2019.

“Alberta Premier Rachel Notley, who also attended the talks in Ottawa, said she was convinced the expansion would be built if the financial assistance deal could be worked out. … British Columbia Premier John Horgan said after the meeting he had not changed his position that the risks of a spill from the pipeline were too great.

“Horgan wants Ottawa to refer the matter to the Supreme Court but the Liberals are not interested, saying it is already clear the federal government has jurisdiction over the project. Horgan also said he would ask the courts in British Columbia to make clear how much powers the province had to protect the provincial environment. Federal officials complain this is a time-wasting tactic.”

On that note, some 200+ protestors have been arrested by police at Trans Mountain facilities in British Columbia over the last few months, despite official opposition to the expansion project. That, taken together with the current stalemate between the provincial government and the federal one, brings to clear contrast just how large the cultural differences are between the west and east coasts of Canada.

As a reminder here, atmospheric greenhouse gas concentrations are continuing to rise at a rapid clip — due to the fact that fossil fuel usage remains right around all-time highs. If anthropogenic climate weirding and warming is to be limited to any real degree, then oil use will have to fall drastically within just the next few years.


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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.



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