Yesterday, the Canadian government announced it will buy Kinder Morgan’s Trans Mountain pipeline project for $3.5B, regardless of the opposition from environmentalists and indigenous groups.
The purchase ensures that the Trans Mountain pipeline, which carries oil from Alberta to a port in Vancouver, will begin a $5.2B expansion this summer.
Here we go again…
The pipeline has become a piping hot topic of discussion in Canada over the environmental concerns that come with tapping Alberta’s oil sands — which has already proven to be a particularly nasty source of pollution (anyone remember the Keystone XL pipeline?).
While the province of British Columbia tries to block it, the oil industry and the province of Alberta argue that the expansion will create needed jobs and help boost the economy.
Canada doesn’t plan to hold onto it forever though, eh?
According to Reuters, the government will offer federal loan guarantees to ensure construction through the 2018 season, then sell it off to the highest bidder when “appropriate.”
The move puts Canadian Prime Minister, Justin Trudeau, in the hot seat as he attempts to strike a balance between the environment and the economy by backing the pipeline expansion, while also pushing a national “carbon price” that charges entities for their greenhouse gas emissions.
Ironically, the expansion would almost triple capacity to 890k barrels of oil from its current 300k.