He’s not even in power, but Jason Kenney, leader of the Alberta United Conservative Party and that province’s leader of the opposition, probably said it best. “We’ve seen this movie before.”
He then referred to how, in September 2017, TransCanada announced a 30-day suspension of its Energy East Pipeline, and a month later, killed it.
Sunday, April 8, was an ominous day for the Canadian Energy industry. Kinder Morgan announced “it is suspending all non-essential activities and related spending on the Trans Mountain Expansion Project.”
The company is giving until May 31, and if things don’t straighten out with the British Columbia government by then, they are pulling the pin.
This is absolutely horrible news for the oil business, pipelines, provincial governments in Saskatchewan and Alberta, workers, and Canadians in general.
A few years ago there were four, count ’em, four, major export pipelines in contention – TransCanada’s Keystone XL and Energy East, Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain Expansion.
U.S. President Barack Obama killed Keystone XL, but newly-elected President Donald Trump approved Keystone XL right after he took office. It’s now been 15 months since he moved into the Oval Office, and still no work has begun. I don’t know if anyone, by this point, truly expects that pipeline to get built.
Northern Gateway was effectively killed with the election of Prime Minister Justin Trudeau, whose declaration that Great Bear Rainforest was no place for a pipeline and he promptly banned oil tanker traffic off the coast near Kitimat, the pipeline’s port. (On this front, Stephen Harper approved the pipeline, but let it get so bogged down with conditions and lengthy approvals, it allowed Trudeau to kill it. He should have pushed it through and had construction started long before he left office.)
The aforementioned Energy East would have had the biggest impact on Saskatchewan. With its proposed Cromer Lateral, it could have potentially taken every drop of oil from southeast Saskatchewan via a new terminal at Moosomin, to new markets. We could have sold oil from Torquay, Stoughton or Carnduff to refineries in Montreal, Quebec City, St. John, American eastern seaboard or overseas. But it’s dead, too.
Kinder Morgan’s project was in many ways the last, best hope of all of these. That’s because almost its entire right-of-way parallel is existing Trans Mountain pipeline, in operation since 1953. All these other projects meant new rights-of-way, with plenty of skittish landowners freaking out with little reason. And the most contentious part of the pipeline was built over a decade ago, through Jasper National Park. It was even going to an existing port!
Now the Left Coast is close to killing it, but not without a fight.
I’m writing this on Sunday. I expect by the time it’s published, Alberta will have started announcing its retaliation. And based on my discussion a few weeks ago with Saskatchewan Premier Scott Moe, there will be retaliation from our province, too. Hopefully the two premiers co-ordinate their response.
I suggested a few weeks ago that the existing Kinder Morgan pipeline, supplying nearly all crude oil and other refined products to the Lower Mainland, be shut down. It looks like it just might happen. A week ago, I would have said it was unlikely. Now I would suggest it’s quite likely.
And I think Saskatchewan and Alberta might also seriously look at cutting off B.C.’s exports of natural gas through our provinces. If our oil is going to be stranded, B.C.’s gas is going to be, too.
Watching B.C. Premier John Horgan talk to reporters after the announcement from Kinder Morgan, a friend of mine thought he looked scared. I begged to differ. I think he might have been a bit smug, having scored a major victory. Horgan acted (and I stress, acted) incredulous, saying there was “No consequence” from the cancellation of Energy East.
On that point, he grossly miscalculated. If Energy East had gone ahead, there would have been dramatically less pressure on Trans Mountain. The same goes for Northern Gateway. But we are now in the bottom of the ninth, two out, a run behind and a runner on second. We need a home run for this industry right now. We cannot take another strike, another out. It’s Trans Mountain or nothing now, and we can’t afford to lose.
Casey’s up to bat and it’s a full count for the Canadian energy industry. We can’t afford a strike out on this one.
Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.
