Kinder Morgan announced Sunday afternoon that it will stop all non-essential work and any related spending on the Trans Mountain pipeline expansion between Edmonton and Burnaby.
The controversial project would twin an existing oil pipeline that extends from central Alberta to the west coast.
“A company cannot resolve differences between governments. 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,” said KML chairman and CEO Steve Kean in a statement.
The company said it would speak with stakeholders before making a decision by May 31, “rather than risking billions of dollars on an outcome that is outside of our control.”
This move comes after Kinder Morgan had already slowed down work on the pipeline expansion, as it focused on advancing the permitting process rather than pushing ahead at full speed during the first half of 2018.
“We appreciate the support shown by the federal government and the provinces of Alberta and Saskatchewan, and are grateful for the strong endorsements among the majority of communities along the route and 43 Indigenous communities, as well as customers, contractors and unions,” Kean continued.
“The fact remains that a substantial portion of the project must be constructed through British Columbia, and since the change in government in June 2017, that government has been clear and public in its intention to use ‘every tool in the toolbox’ to stop the project. The uncertainty created by BC has not been resolved but instead has escalated into an inter-governmental dispute.”
Despite the news, Alberta Premier Rachel Notley said she was “very optimistic” that the pipeline would be built.
“Albertans have been clear, get this pipeline built and Albertans are right, this pipeline must be built,” Notley told the media Sunday.
— Rachel Notley (@RachelNotley) April 8, 2018
She threatened to bring forth legislation that would heat up the trade war between the two provinces.
“If Premier Horgan believes he can harass this project without serious economic consequences for British Columbia, then he is wrong,” Notley said.
“If I was a resident of British Columbia I would be very worried about the investment climate of B.C.”
Speaking at a press conference an hour later, Premier John Horgan said he wasn’t worried in the slightest.
“We are open for business and we are a great place to invest,” Horgan said. “I have no intention of escalating controversy across the country.
“I have every expectation that people will respect British Columbia’s right to defend our interest and defend our coast, and that’s what I will do,” he affirmed.
Although Horgan and Notley haven’t spoken since Kinder Morgan’s announcement today, Horgan said that he has spoken with Prime Minister Justin Trudeau.
While the two disagree on the pipeline, Horgan said “there were no threats, there was no intimidation” from Trudeau, despite a longstanding federal belief that the project is in the national interest of the country.
The Trans Mountain project has been the source of months of tension between the two provinces. Notley instituted, and then reneged from, a ban on B.C. wine, and suspended talks to purchase electricity from B.C., with Horgan vowing to fight the pipeline in court.
“The Government of Alberta can do and should do whatever it thinks is necessary,” said Horgan.
When asked how B.C. can justify pushing back against a federally-approved project, Horgan said he believed protecting B.C. was fully within the province’s jurisdiction.
There was “no constitutional crisis” when Energy East was cancelled, Horgan pointed out.
If Kinder Morgan’s investors are scared off by the interprovincial dispute, Notley said that Alberta wouldn’t be.
“Alberta is prepared to be an investor in the pipeline,” she added, declining to say what that would mean financially for her province.
"Alberta is prepared to be an investor in the pipeline," @RachelNotley says, noting that the province will be a lot more determined than Kinder Morgan's current Trans Mountain investors. "We need to get this thing moving." @BlackPressMedia #bcpoli
— Kat Slepian (@katslepian) April 8, 2018
Notley lauded the federal government for its pro-pipeline stance but said that Ottawa needs to do more to push the project through.
“Federal approval of a project must be worth more than the paper it is written on,” she said.
— Kat Slepian (@katslepian) April 8, 2018
The work stoppage on the pipeline expansion comes just days after Prime Minister Justin Trudeau visited B.C. to reiterate Canada’s commitment to the project, despite ongoing opposition from protesters and the B.C. government.
Kinder Morgan said it has spent $1.1 billion to develop the project since its initial filing with the National Energy Board in 2013. Concern over the provincial government’s participation in an ongoing judicial review and its assertion of broad jurisdiction have created growing uncertainty to the regulatory landscape.