Pipeline Saga: Keystone XL's Cancellation Puts Focus on Trans Mountain

Pipeline Saga: Keystone XL's Cancellation Puts Focus on Trans Mountain
Construction of the Trans Mountain pipeline in Kamloops, B.C., on Sept. 1, 2020. (The Canadian Press/Jonathan Hayward)
Jason Unrau

Although Keystone XL has been cancelled, all Canadians remain owner of the Trans Mountain pipeline and its expansion project, which the federal government acquired in 2018 for $4.4 billion.

But Ottawa’s plan was always to eventually divest of the Trans Mountain pipeline system, and that’s where oil and gas executive Joe Dion hopes his group can play a part.

Dion, CEO of the Western Indigenous Pipeline Group (WIPG), says a consortium of First Nations groups along the existing Trans Mountain right-of-way have backing from “a tier one pipeline company” and are crafting an offer to re-privatize the pipeline.

“[Keystone XL’s cancellation] places a lot more value on Trans Mountain where we're still pursuing buying it—that’s the plan, to buy the whole works,” Dion told The Epoch Times.

“Whoever decides to partner with us would obviously be a part of it.”

While Dion declined to name the pipeline firm, he said there’s been interest in the deal from major oilsands producer Suncor.

Ottawa bought the bitumen pipeline and its expansion project, called TMX, which runs from Edmonton to Burnaby in B.C., after Texas-based Kinder Morgan’s proposed expansion—twinning the existing Edmonton-to-Burnaby line—became mired in court challenges and investors were getting cold feet.

When Prime Minister Justin Trudeau announced that the now state-owned pipeline received its second regulatory green light in June 2019, he opened the door for indigenous ownership and placed no limit on their equity stake.

Almost immediately, three separate indigenous-led buyers emerged, including Dion’s WIPG, Project Reconciliation, and the Alberta-based Iron Coalition. The latter two groups did not respond to a request for comment, but Dion maintains that WIPG has legal priority due to its members’ proximity to the pipeline.

“I think you’ve got to deal with the most impacted First Nations,” and whether the group would invite Project Reconciliation or others into the fold, said Dion.

“They’re the ones who will be directly affected, so they're the ones who are deciding who they will involve, and it'll be their call.”

Whatever ownership form TMX takes, it remains the last hope for a bitumen pipeline to reach tidewater following a list of other projects that have been scrapped. They include Enbridge's proposed Northern Gateway, cancelled months after the Liberals won the 2015 general election, and Energy East, a TransCanada-proposed bitumen pipeline, which the company cancelled in 2017.

TransCanada, now called TC Energy, is also the owner of Keystone XL.

‘Instantaneous Damage’

The death of Keystone XL at the hands of U.S. President Joe Biden on the first day of his administration didn’t surprise Robbie Picard, founder of activist group Oilsands Strong, who said it’s the latest blow to Alberta after Teck Resources shelved its $20.6 billion oilsands project in February 2020.

“I’m more shocked about how [Biden’s] administration is so out of touch with the instantaneous damage this did to people, for families on both sides of the border,” said Fort McMurray-based Picard, who owns a marketing company and in his spare time promotes the energy industry through his Oilsands Strong campaign.

“I know Biden promised he was going to scrap the pipeline, but by actually doing it he just ruined the lives of the tons of families with a pen stroke.”

In the aftermath of Biden’s decision, Keystone owner TC Energy Corp. announced 1,000 related layoffs, while Alberta Premier Jason Kenney has said around 2,000 people will lose their jobs in the province as a result of the cancellation.

“I'm not totally giving up but I'm also focusing my advocacy on what we can do in Canada, and pipeline infrastructure is a huge priority,” said Picard.

“Justin Trudeau is the prime minister who chose to buy and build the Trans Mountain pipeline, and we need to all come together, … no matter who we support provincially or federally, and support him in trying to get that pipeline built for the common good and the sovereignty of our country.”

As recently as November, Trans Mountain Corp., the Crown corporation charged with completing the TMX, reiterated its 2022-year-end operation target, but a workplace accident in mid-December at a construction site in Burnaby has halted construction. Another setback has been the province's COVID-19 restrictions on the construction sites, which has slowed or even shut down work on some sections.

A spokesperson for Trans Mountain Corp. said in an email that the 1,173 km pipeline twinning is “22 percent complete” and there are 7,300 people working on the project at several locales in B.C. and Alberta, involving nine major contractors.
The Parliamentary Budget Office estimated in December that it would cost $12.6 billion to finish the expansion.