Kinder Morgan says it's suspending nonessential spending on Trans Mountain pipeline project
Has a Texas energy giant blinked in the face of massive protests at its Burnaby facility?
That's one conclusion from Kinder Morgan's decision today to suspend nonessential expenditures on its $7.4-billion Trans Mountain pipeline expansion project.
In a news release, the company said it will "consult with various stakeholders in an effort to reach agreements by May 31st that may allow the Project to proceed".
"As KML has repeatedly stated, we will be judicious in our use of shareholder funds," chairman and CEO Steve Kean said in a news release. "In keeping with that commitment, we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend."
He pointed out that pipeline is supported by the federal government, as well as provincial governments in Alberta and Saskatchewan.
Kean claimed that it "faces continued active opposition from the government of British Columbia".
"A company cannot resolve differences between governments," he stated. "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 said that its subsidiary, Trans Mountain, has spent $1.1 billion since its initial filing to the National Energy Board in 2013.
"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," Kean said. "However, given the importance of the Project to Canada and Alberta, to Indigenous communities, our shippers, our contractors, and working Canadians, we are committed to trying to find a way forward, working with stakeholders between now and the end of May on measures that may allow us to advance this critical project, but only if it does not subject KML shareholders to undue risk."
David Mivasair was a member of the self-styled Justin Trudeau Brigade, which held protests outside the gate of Kinder Morgan's Burnaby facility.
"As the first named defendant in Kinder Morgan's lawsuit in B.C. Supreme Court, I am proud of the role my colleagues and I served in directly, physically intervening at KM's construction site at Westridge Marine Terminal and enabling KM to recognize the financial risk to its investors and suspending operations before proceeding further," he said in an email to media. "We expect that KM will respond in a fiscally responsible manner and curtail its investors' losses by ceasing operations rather than continuing to pursue a failing project."
The director of Stand.earth, Karen Mahon, pointed out that Kinder Morgan's announcement came a day after hundreds of people gathered outside the gates of the company's tank farm in Burnaby.
“This project was always a bad investment, and it is getting worse every day as opposition continues to grow," she said in a news release. "The era of massive new investments in fossil fuel projects is coming to an end.”
The Independent Contractors and Businesses Association of B.C., on the other hand, accused the B.C. NDP government of throwing away $5.7 billion in provincial tax revenue and $1 billion in municipal tax revenue by "strangling Trans Mountain".
“Once this project was approved by the federal government after an exhaustive review process, the provincial NDP government and Burnaby city hall were required to act in good faith, and to process permits properly—a message reinforced by court decisions,” said ICBA president Chris Gardner. “If this project fails because of their illegal maneuvering, it would be a crushing blow to Canada’s oil and gas sector and the repercussions for Canada’s economy would be irreparable.”
Burnaby South NDP MP Kenney Stewart was among those who were arrested for violating a B.C. Supreme Court injunction requiring protesters to remain at least five metres away from the gate.
Today, he tweeted a simple message: "We're winning!"