Most work on Canada pipeline halted

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Most work on Canada pipeline halted

Sorry, Mr. Prime Minister.

Kinder Morgan Canada Ltd. announced Sunday that it is suspending all non-essential activities and related spending on the Trans Mountain expansion project.

The only oil economies that are floundering are those, like Alberta and Venezuela, run by lefty governments who think government intervention and public spending will spur growth as surely as private innovation and investment.

"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.

"The effect of their indirection has created a problem of certainty for the proponent". Shares in the company closed down 12.58 per cent at $16.12 after dipping as much as 15 per cent Monday on the Toronto Stock Exchange. The province's government hinted in March that it may cut off oil shipments to British Columbia if the province continues efforts to thwart the expansion.

Without that clarity, the company said it can not continue to move forward with the project. The impasse "is now challenging - in the full view of the global investment community - the very ability of our country to govern itself".

If this pipeline dies, expect a furious pushback to carbon taxes. Kenney made sure not to give unqualified support to Notley's plan, saying the Alberta NDP contributed to the Trans Mountain mess.

A two-track battle awaits.

"Rather than achieving greater clarity, the project is now facing unquantifiable risk", the company said in its statement.

Trudeau's government has been trying to balance the oil industry's desire to tap new markets with environmentalists' concerns.

Environment Minister George Heyman said Tuesday his government is still waiting for the independent lawyer it hired, Joseph Arvay, to draft a reference question on B.C.'s jurisdiction to restrict new oil flow from the proposed twinning of the Kinder Morgan pipeline. "Canada is a country of the rule of law, and the federal government will act in the national interest".

Thousands of people march together during a protest against the Kinder Morgan Trans Mountain pipeline expansion in Burnaby B.C. on Saturday
Most work on Canada pipeline halted

Although Kinder Morgan and the Canadian government suggest that the new provincial government in British Columbia is responsible for the project's suspension, the activist community claims the increased civil disobedience, including a massive protest the day before Kinder Morgan's announcement, and threat of an even larger movement reminiscent of the recent Standing Rock protests are what really won the day.

Because the project is approved, any measures to reaffirm the approval would be essentially ceremonial.

Kinder Morgan estimates construction and the first 20 years of expanded operation would generate $46.7 billion in revenue, with $5.7 billion to British Columbia, $19.4 billion to Alberta and $21.6 billion to Canada.

The TransMountain pipeline will follow relatively closely the route of the existing pipeline built in the early 1950's. That would raise the stakes considerably, something the government appears reluctant to do.

Kinder Morgan's move is the latest development among myriad political and legal wrangling over the Trans Mountain project, which was approved in 2016 by Prime Minister Justin Trudeau. However, Notley also said the pipeline is so important to the province it would consider becoming a co-owner.

"We campaigned with a view to protect our coast, land and water", British Columbia Premier John Horgan, told reporters on a webcast.

The timeline for Trudeau's team to craft a solution is tight.

"A company can not resolve differences between governments", said Steve Kean, KML chairman and CEO. Any further delays may be enough to scuttle the project, he said.

To go ahead, the company needs more certainty, said Kinder Morgan's Chief Executive Steve Kean in a conference call on Monday, which could mean "some kind of preemptive action" to make clear Canada's jurisdiction over the project. If it can't, he said the impact on investment capital will be enormous and crippling.

Weaver, whose three members hold the balance of power with the NDP premier, said the affair shows hypocrisy on the Trudeau government's part, because nobody is talking about the Energy East pipeline's collapse "because it goes through Quebec".

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