Prasad Panda, United Conservative Energy Critic and MLA for Calgary-Foothills
Mission accomplished? Hardly.
Last week, Federal government officials announced plans to purchase the existing Kinder Morgan Trans Mountain pipeline for $4.5 billion, as well as the rights to the much-needed pipeline expansion project, for an additional $7.5 billion.
While Alberta’s Premier tried to claim this outcome as a victory, I think most Canadians recognize a white flag of surrender when they see one.
As a Professional Engineer, I spent the better part of 30 years working for some of the world’s leading energy industry companies. I can tell you for a fact that the decision to purchase the Trans Mountain pipeline project will have significant consequences for years to come. While we are glad that the much-needed project was not cancelled, it sends a troubling message for future investment that this is the only manner in which the project could possibly proceed.
No energy company walks away from a multi-billion dollar project without good cause. Facing a highly organized and well funded death-by-delay campaign from both eco-activists and the BC NDP, Kinder Morgan found itself in an impossible position. While public opinion polls showed majority support for the project, the federal Liberal government repeatedly refused to assert its jurisdiction by using its existing powers. By failing to invoke its powers under the Constitution, the Trudeau Liberals continue to embolden legal and illegal protesters. British Columbia’s NDP government continues its attempts to obstruct this project.
The federal Liberal government routinely pays lip service to the energy industry, but its actions tell another story. Pro-energy governments don’t unilaterally block Northern Gateway, while strangling the Energy East project with new regulations. Pro-energy governments do not fund anti-pipeline protests through the Canada Summer Jobs grant. Pro-energy governments do not impose new taxes and regulations on companies operating here, while at the same time allowing foreign competitors to sell their product in Canada.
Reading the tea leaves on this government’s policies, international oil investors realize that Canada is effectively closed for business. Like many other companies over the past two years, Kinder Morgan opted to cut its losses.
Of course, none of this was necessary. Not only are Canadian taxpayers now on the hook for the $4.5 billion buyout, but if the project ever proceeds, you will now be expected to cover upwards of $7.5 billion more in construction costs. Under government management, there is no predicting the cost overruns on a project of this magnitude.
However, the real cost is much higher. Canada’s reputation lies in tatters. For every dollar spent in purchasing and constructing Trans Mountain, we are losing much more in international investment.
As for the project itself, nothing has changed. The BC NDP continues to delay Trans Mountain, while fringe eco-activists are actively recruiting to illegally blockade construction.
For a G-7 country, this does not look good. Yet, Alberta’s Premier claims that all of this is a victory. I guess nothing says, “Mission Accomplished” like raising a white flag.