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Canada promises 'indemnity' for Kinder Morgan pipeline
#1
Canada promises 'indemnity' for Kinder Morgan pipeline
16 May 2018
[color=rgba(0, 0, 0, 0.65098)]AFP[Image: _101600160_hi046854081-1.jpg][/color]
[color=rgba(0, 0, 0, 0.65098)]A woman protests against the expansion of Texas-based Kinder Morgan's Trans Mountain pipeline[/color]
Canada has promised to cover energy infrastructure giant Kinder Morgan for financial losses caused by political delays to its pipeline project. 
The federal government is in talks with the company over the future of its controversial Trans Mountain expansion. 
The proposed project would carry oil from the province of Alberta to British Columbia (BC) on Canada's Pacific coast. 
It is facing possible delays due to court action launched by BC. 
BC is supported in its opposition to the project by environmental groups and some First Nations. 
Opponents of the Kinder Morgan project are concerned over the environmental impact of extracting more fossil fuels from Alberta's oil sands and the possibility of an oil tanker spill in Canada's Pacific waters.
Last month, Texas-based Kinder Morgan suspended non-essential spending on the Trans Mountain expansion, citing political uncertainty surrounding the project. 
It will decide on the pipeline's fate by 31 May. 
The Trudeau government says Kinder Morgan's Trans Mountain pipeline expansion is in the national economic interest. The expansion project received federal approval in 2016.  On Wednesday, federal Finance Minister Bill Morneau said Ottawa was open to other investors in case Kinder Morgan decided to walk away from the proposed project despite promises from Ottawa to "indemnify" Kinder Morgan for the pipeline. 
[color=rgba(0, 0, 0, 0.65098)]Reuters[Image: _101600156_hi046848175.jpg][/color]
[color=rgba(0, 0, 0, 0.65098)]Federal Finance Minister Bill Morneau promised financial support for Trans Mountain[/color]
Canadian oil producers sell their crude at a discount compared to producers on the rest of the continent because they lack capacity to get their product to tidewater, which would allow it to diversify its energy market.
The Trans Mountain Alberta-to-British Columbia project would twin an existing pipeline and increase its capacity from 300,000 barrels a day to 890,000 barrels a day.
The Alberta government says it is working closely with its federal counterparts to ensure the pipeline construction starts on schedule as planned later this year. 
Last month, about 200 protesters opposing the expansion were arrested for breaking a court injunction barring them from entering within five metres (16ft) of two Kinder Morgan terminals in Burnaby, BC.

http://www.bbc.com/news/amp/world-us-canada-44148405
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#2
I get to say that this is probably the first move that I disagree with our PM.
I get the why.... but was it necessary (legally)?
The truth may be puzzling.  It may not be consonant with what we desperately want to be true. But our preferences do not determine what's true. Sagan
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#3
Yes it was necessary. Horgan and his ilk are trying to strangle the project by delaying it time and again. This introduces unnecessary and uncalled for risk that the pipeline proponent and their investors may not want to take (schedule delays add cost to a project and defer return on capital). The Federal Government is saying that they will indemnify Kinder Morgan for delays caused by the wingnuts; thereby removing the financial risk concerns.
“Great minds discuss ideas; average minds discuss events; small minds discuss people.”
-Eleanor Roosevelt
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#4
(2018-05-17, 08:36 AM)Nanuuk Wrote: Yes it was necessary. Horgan and his ilk are trying to strangle the project by delaying it time and again. This introduces unnecessary and uncalled for risk that the pipeline proponent and their investors may not want to take (schedule delays add cost to a project and defer return on capital). The Federal Government is saying that they will indemnify Kinder Morgan for delays caused by the wingnuts; thereby removing the financial risk concerns.

I think Kinder Morgan have already made up their minds on this one Nanuk.
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#5
Yes they may have. Which is why plan B involves the Alberta Government buying an equity position.
“Great minds discuss ideas; average minds discuss events; small minds discuss people.”
-Eleanor Roosevelt
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#6
(2018-05-17, 08:55 AM)Nanuuk Wrote: Yes they may have. Which is why plan B involves the Alberta Government buying an equity position.

Notley is going to be screwed regardless come next election.   Her base will freak when she has to do this for sure using tax dollars, and the rest of the voters will use this as more ammo of more debt.  

She is kinda stuck on this one for sure
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#7
(2018-05-17, 08:41 AM)maclintock Wrote:
(2018-05-17, 08:36 AM)Nanuuk Wrote: Yes it was necessary. Horgan and his ilk are trying to strangle the project by delaying it time and again. This introduces unnecessary and uncalled for risk that the pipeline proponent and their investors may not want to take (schedule delays add cost to a project and defer return on capital). The Federal Government is saying that they will indemnify Kinder Morgan for delays caused by the wingnuts; thereby removing the financial risk concerns.

I think Kinder Morgan have already made up their minds on this one Nanuk.

Could be right. The indemnity would also be in favour of another entity that takes on the project.


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#8
What does the Gov't plan on doing about protesters holding this up?   Are they prepared to bring in the army if necessary?

Is Alberta prepared to cut off gas to BC & really put the screws to them?   Bankrupt them?
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#9
The BC attorney general has as much as admitted that they don't expect to win their constitutional reference case. They really are doing all this to delay. So the Feds are trying to take away that threat, to the extent they can
"Hope is not a strategy"
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#10
(2018-05-17, 09:42 AM)HockeyHippy Wrote: The BC attorney general has as much as admitted that they don't expect to win their constitutional reference case. They really are doing all this to delay. So the Feds are trying to take away that threat, to the extent they can

The Federal Government should pass the delay costs onto BC in the form of a tax or garnishee against any future transfer payments.

Why should all our tax dollars pay for BC's petulant stupidity??
A leader without followers is just a person taking a walk...
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#11
An interesting article today in the Calgary Herald by Lisa Corbella. It recaps pipelines approved and built under the previous government including a Kinder Morgan project know as the Anchor Loop Project. It twinned the existing Trans Mountain line between Hinton, Alberta and Hargreaves, B.C.

Stephen Harper was prime minister of Canada from February 2006 until November 2015.

Enbridge’s Alberta Clipper (Line 67) pipeline expansion from Hardisty, Alberta, to Wisconsin was approved in 2006 and construction was completed on April 1, 2010. That pipeline covers 1,081 km and exports an additional 800,000 barrels per day (bpd) of crude oil to Canada’s largest customer.

Also completed in 2010 is Enbridge’s Southern Lights Pipeline from Manhattan, Illinois, up to Edmonton. That pipeline — covering a length of 2,556 km — transports diluent to Edmonton to aid in shipping bitumen through pipelines.

Then there’s the Mount Robson & Jasper Park Expansion, also known as the Anchor Loop Project. Construction on that Kinder Morgan project began in August 2007, adding a 158-km section of pipeline to the existing Trans Mountain pipeline system between Hinton and Hargreaves, B.C., near Mount Robson Provincial Park. It included twinning a part of the pipeline system across Jasper National Park, which won Kinder Morgan an award.

That is exactly what Kinder Morgan wants to do with its existing pipeline to Burnaby — continue twinning its Trans Mountain pipeline. The company has warned that it is prepared to abandon the already-federally approved pipeline owing to the delay tactics by British Columbia’s minority provincial NDP government led by Premier John Horgan.

Also, a portion of TransCanada’s Keystone pipeline was approved in 2006 and was completed in 2010 taking crude from Alberta to Nebraska spanning a whopping 4,324 km.

http://calgaryherald.com/opinion/columni...ine-legacy

So, PM Trudeau has a lot of catching up to do if he wants to compare records with his predecessor. It is about time the Federal Government quits pussyfooting around. They would not have to offer to indemnify anyone if they declared this project of national interest used existing federal power under the constitution to formally declare the project to be of national interest.

A colleague of Lisa Corbella's has an article today the expands of FM Morneau's comments yesterday that if Kinder Morgan doesn't run with the project there are other interested parties, rumoured to be either TransCanada or Enbridge. That would be a fine episode where Trudeau had scuttled both of those companies projects and now would be backstopping them financially to take over the TM!

http://calgaryherald.com/news/politics/b...-are-upset
“Great minds discuss ideas; average minds discuss events; small minds discuss people.”
-Eleanor Roosevelt
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#12
I wonder if Canada/Alberta would sue the BC government (after the issue is settled) and seek exemplary damages?

It would set a precedent on provincial government knowingly acting unconstitutional.
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#13
If the federal government has to pay out on an indemnity, rest assured they will pursue their right of subrogation.
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#14
(2018-05-17, 05:29 PM)Pouzar Wrote: If the federal government has to pay out on an indemnity, rest assured they will pursue their right of subrogation.

Since this was a voluntary decision by the government, would that effect a subrogation claim?

I know little to nothing on law in that area.
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#15
I wouldn't think so - every guarantee is essentially voluntary, doesn't take away common law subrogation rights.

KM may require that the government waive the subrogation rights until they are paid in full but that might not even be enforceable.
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#16
Yesterday about 100 business, indigenous, and labour leaders flew to Edmonton to express their support for the Kinder Morgan Pipeline expansion.

http://edmontonjournal.com/news/politics...n-edmonton
“Great minds discuss ideas; average minds discuss events; small minds discuss people.”
-Eleanor Roosevelt
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