Notley demands 'concrete action' from Ottawa to get Trans Mountain pipeline moving

Kinder Morgan is suspending "non-essential activities" and related spending for the Trans Mountain pipeline project, citing ongoing opposition from the British Columbia government.

Says Rachel Notley to B.C.: 'You can mess with Texas, but you can't mess with Alberta'

Kinder Morgan announced Sunday that it would halt all non-essential spending related to the Trans Mountain pipeline due to ongoing opposition from the B.C. government. (Kinder Morgan)

Kinder Morgan is suspending "non-essential activities" and related spending for the Trans Mountain pipeline project, citing ongoing opposition from the British Columbia government.

"In the current environment, we will not put [Kinder Morgan] shareholders at risk on the remaining project spend," Steve Kean, Kinder Morgan's chair and chief executive officer, said in a press release Sunday afternoon.

The company said it will consult with stakeholders in an effort to reach agreements before May 31 that could allow the pipeline project to proceed.

The pipeline project has support from the federal government, as well as the provincial governments in Alberta and Saskatchewan.

At a press conference Sunday afternoon, Alberta Premier Rachel Notley said the May 31 deadline imposed by Kinder Morgan is a serious concern for Alberta, but said she is confident that the expanded pipeline will be built.

Rachel Notley on the federal approach to Trans Mountain

5 years ago
Duration 7:42
'There's a carrot and stick approach...there's been a lot of carrots from the federal government to B.C.,' says the Alberta premier.

Notley said she can understand the frustration of Kinder Morgan's Houston-based board with "not knowing how many more legal fronts they need to fight."

But she added that this pipeline is so important to Alberta that the province would consider becoming a co-owner. "Alberta is prepared to do whatever it takes to get this pipeline built – including taking a public position in the pipeline," she said. "Alberta is prepared to be an investor in the pipeline.

Alberta Premier Rachel Notley called a media conference in Edmonton Sunday to react to the Kinder Morgan announcement that it is suspending Trans Mountain activities in the face of continuing opposition from the B.C. government. (Government of Alberta / Supplied)

Notley had strong words for both the federal government and for B.C. Premier John Horgan.

The federal government has delivered what she called "concrete" assistance to other Canadian sectors, such as the aerospace industry, and Notley said it's time the federal government stepped up to provide concrete action for the energy industry.

Continues tensions with B.C.

"We are calling on the federal government to act on behalf of Alberta and the pipelines," she said.

As for Horgan, she said B.C.'s continued resistance will not go unanswered. Legislation will be introduced in coming days that will have "serious economic consequences" for B.C., she said.

"Maybe the government of B.C. feels they can mess with Texas — and who knows, maybe they can. But let me be absolutely clear. They cannot mess with Alberta."

Notley had been planning to travel to New York as part of her push to get the Trans Mountain pipeline built, but that leg of the trip has now been cancelled.

On a swing through western Canada this week, Prime Minister Justin Trudeau repeatedly cited his government's backing of the pipeline. Following the Kinder Morgan announcement on Sunday, Trudeau vociferously reiterated that sentiment on Twitter.

"Canada is a country of the rule of law, and the federal government will act in the national interest. Access to world markets for Canadian resources is a core national interest," tweeted Trudeau, who was in Humboldt, Sask. at the time.

"The Trans Mountain expansion will be built."

A statement from federal Natural Resources Minister Jim Carr on Sunday urged the B.C. government to "end all threats of delay" to the pipeline expansion.

"His government's actions stand to harm the entire Canadian economy. At a time of great global trade uncertainty, the importance of Canada's role in the global energy market is bigger than individual projects and provinces."

Horgan held his own media conference in Victoria, where he said he wouldn't waver from his position and supports the rights of British Columbians standing up for the interests of the province.

B.C. Minister of Environment and Climate Change Strategy George Heyman answers questions about the Alberta dispute during a press conference at the Legislature in Victoria, B.C., on Wednesday February 7, 2018. THE CANADIAN PRESS/Chad Hipolito (Chad Hipolito/The Canadian Press)

"My views on this have been consistent for the past year," Horgan said. "We believe the risk is too great and there is no evidence to indicate that that risk has been diminished.

"There's the view of the government of Alberta, there's the view of the federal government and then there's the view of the shareholders in Texas. I'm here to defend British Columbians."

Kinder Morgan has spent about $1.1 billion on the $7.4-billion project so far.

Horgan is pursuing a reference case in the courts to determine if his government can control the shipment of oil through the province on environmental grounds — something Kinder Morgan mentioned on Sunday as a factor in its decision.

Environmental assessment

There is also another legal challenge active in the Federal Court of Appeal, where the federal government's approval and B.C.'s environmental assessment certificate for the project are being challenged.

The company said that the active opposition from B.C. and Horgan is not something it can deal with and it needs to take action to protect its shareholders.

"A company cannot resolve differences between governments," Kean said.

"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 project would see the pipeline's capacity more than doubled to help transport bitumen from the oilsands to the West Coast for shipping.

A trade war between provinces?

It has faced intense opposition in British Columbia and has been tied up in the regulatory system and the courts for years.

The project has also led to threats of a trade war between B.C. and Alberta, and there have been ongoing protests on the West Coast, particularly in Burnaby.

In the news release, Kean said that the company could be "risking billions of dollars on an outcome that is outside of our control," a situation that is not financially acceptable.

The company entered 2018 with a focus on advancing the permitting process until it achieved clarity on permits, approvals and judicial reviews.

But that isn't how things are turning out, Kean said.

"The project is now facing unquantifiable risk," Kean stated.

"Unfortunately, B.C. has now been asserting broad jurisdiction and reiterating its intention to use that jurisdiction to stop the project … Those actions have created even greater, and growing, uncertainty with respect to the regulatory landscape facing the project."

Mike Hudema, Greenpeace's climate and energy campaigner, said Kinder Morgan's action is a signal of what's to come.

"The writing is on the wall, and even Kinder Morgan can read it. Investors should note that the opposition to this project is strong, deep and gets bigger by the day," Hudema told CBC News.

"We encourage Kinder Morgan to shelve this project before the litany of lawsuits, crumbling economics, and the growing resistance does it for them."

With files from The Canadian Press