The current impasse on the Kinder Morgan Trans Mountain Pipeline Expansion have many pundits, politicians and citizens taking entrenched positions insinuating that this issue has an easy fix the Trudeau Federal Liberal Government is not willing to pursue.
We list eight options for the Federal Government below, but as a primer, watch this video in which CBC’s Peter Armstrong asks five knowledgeable people over 4 interviews, “What specifically can the Canadian Federal Government do to force the Trans Mountain Pipeline expansion? You will see that from all sides, there is a lot of humming and hawing. We cut this down from 30 minutes of discussion and we cut out three speakers who added nothing to he very direct, repeated question:
Below is a list of 8 items the Canadian Federal Government can do to force the expansion of the Kinder Morgan Trans Mountain Pipeline, in order from most likely to least likely:
1 – Political Pressure
I think it is fair to say that straight political pressure the from the Federal Government and several notable Provincial partners has been tried and failed.
2 – Back Room Deal
A so called “back room deal” often solves these types of conflicts. The deal typically involves the Federal Government quietly pledging support for some completely unrelated (and often future) Provincial project in order to garner approval for a project. By definition, we will not know what offers have been or will be made, but by all accounts several offers have been made by the feds and rejected by the BC Horgan Government
3 – Reduce Investor Exposure To Political Risk
Eliminating political risk is what Kinder Morgan asked for but of course that is impossible. The best the Federal Government can do is pay for any delays and that eliminates the financial risk to Kinder Morgan investors.
4 – Provide Loan Guarantees
The Federal Government has often provided INSURANCE for private sector loans to reduce risk on large projects. So called Loan Guarantees usually cost governments nothing because the loans get paid back. This is likely the next step the Trudeau Liberal Government will take to further reduce risk to Kinder Morgan.
5 – Wait For The BC Government To Fall In The Summer of 2018
It appears that the 3 Green Party members keeping the Horgan NDP minority BC Government in power will withdraw their support this summer over issues with the Site C dam. If that happens, a Provincial election in BC would be unlikely to return Horgan to power. Given the support for the Trans Mountain Pipeline in BC is about 60% right now (and political decisions are often made with as low as 40% public support), a change of BC Provincial Government would likely make this issue go away.
6 – Take An Ownership Position
The Canadian Federal Government could buy some or all of the existing and expansion pipeline but it would almost certainly have to contract the maintenance and management back to Kinder Morgan. This is an unlikely scenario because it would be technically challenging and would not see any notable change in the construction schedule. It would be a lot of effort and money to end up in the same place.
7 – Withhold Transfer Payments
This is oft discussed by politicians and citizens who do not understand how difficult and how precedent setting it would be. While it is possible for the Federal Government to delay payments, they are unlikely to refuse payment outright.
8 – Police Action
Providing Police or Military support for construction crews is what many citizens would like but history has shown this always ends badly. Clearly the police will need to periodically remove illegally positioned protesters during and after the construction of the Kinder Morgan Trans Mountain Pipeline expansion, but large scale police / military force is not the Canadian way and it will not work.
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