Trudeau government clearing way for Kinder Morgan pipeline

Prime Minister Justin Trudeau has set the table for Canada to approve  Kinder Morgan Inc.’s Trans Mountain pipeline expansion by announcing environmental measures aimed at placating opposition to the project.

Trudeau unveiled a national carbon price in October, and over the past few weeks has pumped billions into marine protection and “green” infrastructure, as well as begun an overhaul of the federal energy regulator and granted crown protection to a rainforest that essentially blocks a rival proposal. He regularly says it’s his job to get Canada’s resources to market while balancing the environment and economy.

The Liberal prime minister has also backed a hydro dam and natural-gas project favored by British Columbia Premier Christy Clark, as any quid-pro-quo support from her for Kinder Morgan would help him claim consensus ahead of the Dec. 19 deadline for a final decision by the Trudeau cabinet. However, opposition from Vancouver’s mayor, indigenous communities and environmentalists will test Trudeau’s resolve to approve the pipeline and defend the decision against a likely court challenge by its detractors.

“You could interpret all these signs as part of a grand design to make construction of one or two pipelines possible,” said Tom Flanagan, a former adviser to  Stephen Harper, Trudeau’s Conservative predecessor. “Let’s hope he has the stomach to see it through if the opposition continues after the announcement of cabinet approval, because I think it will.”

The election of Donald Trump as U.S. president has also raised hopes that TransCanada Corp.’s Keystone XL pipeline will be revived, giving Canada — home of the world’s third-largest proven oil reserves — another option for its growing crude production. While Trudeau supports Keystone, he and his officials regularly stress Canada’s need to get its resources to “tidewater,” suggesting the TransCanada project isn’t enough. Alberta Premier Rachel Notley has echoed that, saying the oil-producing province still wants a pipeline to the ocean regardless of Keystone and will back Trudeau’s carbon pricing plan if he gets “energy infrastructure” built.

Proposals in Play

Trudeau believes Canada needs at least one new oil pipeline and is said to consider Kinder Morgan’s expansion — a 1,150 kilometer (710-mile) route that would roughly triple current capacity — the favorite of five major proposals. In addition to Keystone, the other projects are TransCanada’s Energy East, currently under regulatory review; Enbridge Inc.’s Line 3, an inland route to the U.S. that Trudeau must approve or reject by Nov. 25; and Northern Gateway, another Enbridge proposal that was approved by Harper only to have its permits rescinded by a court ruling that Trudeau and the company opted not to appeal.

The prime minister must decide whether to do additional indigenous consultation and reissue Gateway’s permits, but he opposes the pipeline’s current route through the Great Bear Rainforest. The Duke and Duchess of Cambridge added the area to the Queen’s Commonwealth Canopy conservation initiative during a recent visit, effectively bolstering its protection. Trudeau has also proposed an oil-tanker ban along its shipping route and has flatly opposed the project in the past.

That makes Kinder the only near-term pipeline headed to the ocean, raising expectations Trudeau will approve it after the recent environmental measures. “What they’re doing is trying to soften the ground of resistance,” according to Nathan Cullen, a lawmaker with the opposition New Democratic Party whose district includes part of the Gateway route and the Petroliam Nasional Bhd natural-gas project the government approved in September.

“A little bit of lipstick on a pig is the most generous I can be right now,” Cullen said in an interview, adding that Trudeau is losing the benefit of the doubt on Canada’s west coast. “He has more than Harper did, but he has less of it than he did a year ago.”

Electoral Coalition

The federal decision is the last step that would clear the way for the pipeline to be built — barring successful legal challenges, as happened with Northern Gateway — and comes after the National Energy Board regulator granted conditional approval to the project earlier this year. Trudeau faces pressure from environmental advocates to reject energy projects as he seeks to cut emissions.

Meanwhile, Kinder Morgan Canada’s president, Ian Anderson, recently clarified that he believes fossil-fuel consumption is driving climate change. Trans Mountain cemented support from 41 indigenous communities and expects more endorsements, Anderson said in October. The company will begin construction on the pipeline in 2017 if it’s approved and expects to ship oil by 2019. It declined a request for further comment Friday.

Trudeau was elected on firm environmental pledges, yet hasn’t detailed how he will meet his Paris climate-conference goals as the country confronts weak economic growth and slumping commodities prices that have hurt Alberta.

Last week in Vancouver, the prime minister unveiled C$1.5 billion ($1.1 billion) in funding for ocean protection over five years in a move lauded by environmentalists. Critics, however, were quick to say the money doesn’t make the pipeline acceptable.

Pipeline Detractors

“The proactive way to prevent massive impact from an oil spill on B.C.’s south coast is to not approve” Trans Mountain, Vancouver Mayor Gregor Robertson said. “I strongly urge the federal government to reject Kinder Morgan’s pipeline proposal.”

Signing off on the pipeline would be “one in a series of decisions that seem to fly in the face” of the Paris climate plan, according to Josha MacNab, a regional director at the Pembina Institute, an environmental think-tank. “I don’t think he should underestimate the extent to which Kinder Morgan, if approved, will be a flash-point in British Columbia.”

Trudeau lived in Canada’s westernmost province as a young man and frequently refers to it as his second home. Last week he also announced a C$45 million contribution to an engineering program at Simon Fraser University near Vancouver, saying he was there because “it’s important to stay grounded where your roots are.”

Canadian lawmakers return to Ottawa Monday after a one-week break, their last before the Kinder Morgan deadline. Trudeau’s cabinet will weigh the project’s political impact, environmental risks and economic benefit in its decision.

“The government certainly appears to be setting the table for approval,” said Ed Greenspon, president of the Public Policy Forum, an non-partisan think-tank based in Ottawa. “The prime minister has been consistent in saying climate policies and energy development can co-exist, middle class jobs are top of his agenda, and he won’t leave Alberta out in the cold. He’s taken risks before and looks ready to take some flack here.