This week the federal government announced they would be buying the Kinder Morgan pipeline. The upfront cost is $4.5 billion, plus however many billions needed for construction.
Reactions were swift and harsh with critics on both the left and the right. Certainly, nobody wants to see billions of tax dollars get wasted, something that is now a possibility if the project is brought to its knees in court (whatever the chances of that are).
It’s way too early to say if buying the project was the right decision, both for the country as a whole and for the Liberal’s chances of winning another election; however, it’s interesting contemplating the potential consequences.
Whether you are in favour or against the project, while the outcome is uncertain, the federal government owning it can be seen as a good thing regardless of your position on the project.
For those worried about the environment, the project being taken away from Kinder Morgan is going to improve your chances of a favourable outcome.
Ultimately, the court results are independent of ownership. It doesn’t matter if the project is owned by the federal government, Kinder Morgan or another company (seeing as how the Liberals are looking to sell it). Hence, environmentalists’ best chance of stopping the project are unaffected.
Furthermore, the stereotype that government faces delays on projects, is there for a reason. With an election looming a little more than a year away, it’s certainly possible that, between construction and court cases, the government will still be stuck with this project at that time. Another government might look differently upon the project. Just because the NDP decided to proceed with Site C doesn’t mean that result would be replicated with Kinder Morgan.
Finally, if the project does make it through court and past all the hurdles, it’s better to be in the current position. Kinder Morgan was looking to ship raw bitumen. With the federal government looking for a new buyer, it’s not an impossibility that a new buyer wouldn’t also first refine it; certainly Black Press CEO David Black has been a big proponent of that. Refined oil would, at the very least, be less bad in the event of a spill.
This is also a reason for optimism for those who only care about the economic impact of the project. A new buyer might do something like creating a refinery, bringing more jobs to Canadian soil. Furthermore, if the project does go ahead, Canadians now stand to benefit from the project bringing revenue to government coffers.
Undoubtedly, this outcome is what the federal government is hoping for: completing the project within the next year, resolving any court and other obstacles and selling it at a (big) profit, ideally with the new buyer creating added jobs and value for Canadians while reducing the environmental risk (at least a little bit).
However, that may just be a pipe dream.
