Kinder Morgan announced Sunday it is putting much of the project on hold because of opposition in British Columbia. The company will consider its options and by May 31 decide to kill or proceed with the project.
Kinder Morgan announced Sunday it is suspending the cross-Canada Trans Mountain Pipeline except for “essential” spending, pending a decision by May 31 to kill or proceed with the controversial project.
The Houston-based energy firm has proposed a more-than-700-mile-long pipeline from Alberta to Burnaby, B.C., intended to nearly triple the transport of bitumen oil from Canada’s interior to the coast to 890,000 barrels a day.
But the company in a statement Sunday said opposition to the project, particularly by the government of British Columbia, has put completion of the project in doubt.
“While we are prepared to accept the many risks traditionally presented by large construction projects, extraordinary political risks that are completely outside of our control and that could prevent completion of the project are risks to which we simply cannot expose our shareholders,” Kinder Morgan Chairman and CEO Steve Kean said in the statement.
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The announcement came after another wave of civil disobedience against the project over the weekend, following mass demonstrations against the pipeline less than a month ago. More than 172 people have been arrested in the past month, including university professors, First Nations leaders and elders, members of parliament, city officials, celebrities and ordinary citizens by the score.
Rooted in concern over climate change, oil spills, species extinction and indigenous rights, opposition to the pipeline on both sides of the border has been wide and passionate — and apparently effective.
“Kinder Morgan blinked,” said Grand Chief Stewart Phillip, an Okanagan aboriginal leader and president of the Union of B.C. Indian Chiefs, a political advocacy organization representing 118 bands and First Nations within British Columbia.
While the company stopped short of saying it is canceling the project, many predicted this is its death knell.
“At the end of the day, Kinder Morgan realizes you can’t build a pipeline in a war zone,” Phillip said. “Needless to say, we are ecstatic.”
The fracture of the country — with British Columbia pitting itself against interior provinces and the federal government that back the project — made the company cool on whether the pipeline is buildable.
A substantial portion of the project faces construction in British Columbia, where a new government elected in June 2017 changed the political landscape, with the leaders of the province vowing to use “every tool in the toolbox” to stop the project. The British Columbia government went to court to overturn the permits granted by its predecessors, one of 16 lawsuits pending against the project
“A company cannot resolve differences between governments,” Kean said. “While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments.”
The company was seeking greater clarity on its outstanding permits, approvals and judicial reviews. “But rather than achieving greater clarity, the project is now facing unquantifiable risk,” Kean said.
The company has already spent $1.1 billion on the project since its initial filing with the National Energy Board in 2013, but at this point dares not invest significantly more without certainty the project can be built, Kean said.
Some believe that with the project on life support, backers who hadn’t stepped forward to date will now in order to rescue a project Canada needs.
“This seven-week deadline will concentrate the will of the country to get this critical project completed,” said Stewart Muir of Resource Works Society, a nonprofit funded by the Business Council of British Columbia.
“Those people will be finding their voice in the next seven weeks to make sure a necessary project is not lost for the benefit of the Canadian people.”
But Kennedy Stewart, member of Parliament for Burnaby South, the neighborhood where the protests — the largest ever in the city’s history — have been held, said he can’t imagine a turnaround.
Recently arrested himself for demonstrating against the pipeline, he said it takes a lot for law-abiding people to risk arrest. But even Kinder Morgan did not request police to round up hundreds more demonstrators last Saturday, Stewart said. And more will be coming, he predicted.
“Being on the ground, you get a different sense about the level of the opposition.”