The political-oil pipeline

The political-oil pipeline

Kinder Morgan is suspending work on Trans Mountain pipeline expansion and more.

The Trans Mountain Expansion Project was proposed in response to requests from oil companies to help them reach new markets by expanding the capacity of North America’s only pipeline with access to the West Coast.

These shippers have made significant 15- and 20-year commitments that add up to roughly 80% of the capacity in the expanded Trans Mountain Pipeline.

On November 29, 2016, the Government of Canada granted approval for the Trans Mountain Expansion Project (the Project). Earlier, on May 19, 2016, following a 29-month review, the National Energy Board (NEB) concluded the Project is in the Canadian public interest and recommended the Federal Governor in Council approve the expansion. These approvals allow the Project to proceed with 157 conditions. In addition, the British Columbia Environmental Assessment Office (BC EAO) issued an environmental assessment certificate for the Trans Mountain Expansion Project.

The original Trans Mountain Pipeline was built in 1953 and continues to operate safely today. The expansion is essentially a twinning of this existing 1,150-kilometre pipeline between Strathcona County (near Edmonton), Alberta and Burnaby, BC. It will create a pipeline system with the nominal capacity of the system going from 300,000 barrels per day to 890,000 barrels per day.

The Trans Mountain Expansion Project will help make sure Canada gets full value for its oil. Everyone will benefit. Workers will benefit during the $7.4 billion construction project. Oil producers will earn more revenue for their product. Government will collect more tax revenue from oil. These revenues contribute to services that benefit all Canadians.

Currently, nearly all the oil produced in Western Canada goes to one market, the United States Midwest. However, there’s a limit to how much oil this market needs. For much of the last decade, Canada has been selling into the United States at a discount to the world price for similar oil products.

Every day, member companies of the Canadian Energy Pipeline Association (CEPA) move enough crude oil and petroleum products through pipelines to fill 15,000 tanker truckloads and 4,200 railcars. The existing Trans Mountain pipeline system moves the equivalent of about 1,400 tanker truckloads or 441 tanker railcars daily. Expanding the Trans Mountain pipeline results in safer, more efficient and more economic shipment of oil between Alberta and BC.

So, where is the problem? Trans Mountain pipeline dispute needs political solution, Steven Kean, Kinder Morgan CEO, says.

Kean says there needs to be a clear political signal that there won’t be additional delays in the wake of the company announcing the suspension of all non-essential activities and related spending on the project.

Kinder Morgan is open to discussing an investment in its Trans Mountain pipeline expansion by the Alberta government if there’s clear assurance that the project can actually be completed, the company’s chief executive said Monday.

Alberta Premier Rachel Notley suggested the province could invest in the project to ensure completion of the project after the company announced it has suspended all non-essential activities and related spending on the pipeline expansion to carry Alberta bitumen from the oilsands to an export terminal near Vancouver.

Opposition to the pipeline has ramped up in recent weeks, with about 200 people arrested near the Burnaby marine terminal in the last month.

2018-04-12T16:12:10+00:00

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