Canada Rescues Embattled Kinder Morgan Pipeline Project

Canada Rescues Embattled Kinder Morgan Pipeline Project

Environmental groups and indigenous communities have long fought against any expansion of the pipeline, which they say contradicts the country's climate commitments. Canada has the world's third largest oil reserves but 99% of its exports now go to refiners in the United States, where limits on pipeline and refinery capacity mean Canadian oil sells at a discount.

Instead, Notley visited the McMurray Métis Festival before speaking with media at the Oil Sands Discovery Centre, where she defended her government's pipeline advocacy and spoke on the importance pipelines have on the Canadian economy.

A British Columbia Supreme Court judge said that those protesting the pipeline have made a deliberate effort to blockade two of the Burnaby work sites.

He added the purchasing consortium should also include an established pipeline company such as TransCanada Corp. or Enbridge look after operations.

The Canadian federal government agreed this week to buy the Trans Mountain pipeline system as well as the expansion project in a C$4.5 billion (US$3.46 billion) deal.

BC's opposition had almost killed the project...and still might finish it off despite the gamble by the federal government to nationalize the pipeline system. Those First Nations who are opposed to the pipeline (many support it) have stepped up their rhetoric with Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, warning of a violent Oka-like standoff, a reference to a 1990 Mohawk protest in Quebec where a police officer was killed.

Ahead of the federal intervention, Moody's Investors Service said oil-rich Alberta could face a significant loss in revenue if the project were cancelled.

Finance Minister Bill Morneau says the federal government's nationalization of the Trans Mountain pipeline project sends the message that Canada is a safe place to invest. The cost of pipeline bottlenecks continues to weigh on Canada's oil industry.

Kinder Morgan Canada (TSE:KML) had its price target decreased by Royal Bank of Canada from C$24.00 to C$18.00 in a research report released on Wednesday.

"It does not matter who owns the pipeline", said Horgan.

Many said it is a step they were willing to take if it meant construction would be stopped.

The Provinces of British Columbia in April asked the B.C. Court of Appeal to decide the province has the power to restrict increased heavy crude shipments to its coast due to oil spill fears.

Ottawa's decision to buy the pipeline expansion project does not entirely clear away the uncertainty surrounding it, says Alexandre Moreau, public policy analyst at the Montreal Economic Institute.

Though the expansion has received federal approval, it has seen numerous delays because of local opposition and legal challenges. "And the way things are going, Ottawa might even have trouble finding a buyer for the pipeline down the road", said Moreau.

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