The Canadian government is planning to buy the Trans Mountain oil pipeline from major energy corporation Kinder Morgan for $4.5 billion in an effort to secure its construction. The controversial project, which would triple the current capacity of the Trans Mountain pipeline and run from the tar sands of Alberta to the Pacific Coast, is a major priority for Ottawa. The pipeline has suffered delays due to opposition from indigenous communities and environmental groups. Alberta and British Columbia have also been at odds over the potential environmental risks of the project. With the Canadian government’s financial and political support, the project is more likely to move forward.
The Trans Mountain pipeline expansion project would vastly increase Canada’s ability to export oil to Asia. Canada possesses the world’s third largest oil reserves, but 99 percent of its oil exports are sold in the U.S. While the government’s takeover of the project has reassured its backers that it will be built, with construction starting in August, it also raises the stakes for Ottawa. “It’s a chess move that allows the project to proceed and positions it as a national interest,” infrastructure expert Matti Siemiatycki told the Guardian. “[But] it’s also highly risky because now the government bears the risk.”
The government intervention to save the project is based on the idea that investing in oil today will pay off in the future, something that is far from certain. “The pipeline expansion presumes there’s going to be a high demand for oil going forward for decades — but there’s significant risk that that may not prevail because of changing technologies and changing demand,” explained Siemiatycki.
Meanwhile, environmental and indigenous groups continue their opposition. “The cost that they did not calculate in their $4.5 billion purchase is that Indigenous frontlines will stop this pipeline,” Tsleil-Waututh member and Coast Salish Watch House spokesperson Will George said in a statement. “The Watch House will continue to stand in the way of pipeline development, and I will continue to meet the responsibility passed on to me by my ancestors to protect the water and land.”
In a statement, Greenpeace campaigner Mike Hudema asserted that “Trudeau is gambling billions of Canadian taxpayer dollars on an oil project that will never be built — a project that Kinder Morgan itself has indicated is ‘untenable’ and that faces more than a dozen lawsuits, crumbling economics and a growing resistance movement that is spreading around the world.” Even with government support, it remains to be seen whether the project will ultimately be completed.
Via the Guardian