Pipeline plight: Carr confident feds will convince Kinder Morgan to proceed

OTTAWA — Natural Resources Minister Jim Carr says he is absolutely certain Canada and Kinder Morgan will come to a financial agreement that will convince the pipeline builder to proceed with the Trans Mountain expansion before a May 31 deadline.

Speaking at a Canadian Global Affairs Institute conference Tuesday, Carr said it was understandable that the threat of "endless court action" gave Kinder Morgan's investors pause about proceeding with the project, which would triple the capacity of the existing Trans Mountain pipeline between Edmonton and Burnaby, B.C.

Ottawa green-lighted the expansion in November 2016, but a month ago the company hit pause on all non-essential spending on the project, saying ongoing opposition in British Columbia and the threat of legal delays was making it rethink moving forward.

The company gave Ottawa until the end of May to convince it there is confidence to proceed.

"We're working towards a pretty hard deadline and people are working diligently away at it," said Carr.

"I'm confident there will be a solution."

Prime Minister Justin Trudeau interrupted a foreign trip to return to Ottawa and meet the premiers of B.C. and Alberta to try and solve the matter, after which he said he had dispatched Finance Minister Bill Morneau to come to a financial agreement with Kinder Morgan to help alleviate the risk to investors so that the project can move ahead.

Carr said everyone knows the government and the company have just a few more weeks to find a way for Ottawa to help alleviate investor jitters.

"We have to have more to announce in the next few weeks," said Carr.

There are three weeks until the deadline, but Conservative natural resources critic Shannon Stubbs says there are only 12 days left for the government to introduce its promised legislation reasserting federal authority to approve and build the pipeline.

Carr said legislation is still one of the "options being discussed" but would not say if the government will introduce legislation this month.

"We'll see," he said. "There are things that are being considered now."

Stubbs said the fact the minister is being vague about legislation with so few days left until the deadline is a problem.

"It's exactly this kind of uncertainty that is driving record levels of energy investment from Canada," she said.

Carr acknowledged Tuesday there are current challenges for investment in Canada's energy industry but he said the country will be just fine in the long-term.

"We are attentive to the competitive issues always," he said. "We're alert to them. But I have a lot of confidence in our capacity to compete internationally in the energy sphere."

Carr also said as the world transitions to cleaner fuels, it will be decades before traditional oil is cast aside, requiring that Canada continue to develop and sell it in order to finance the path to a greener future. He said he would much rather ship oil by pipeline than by rail.

The government has argued for months that Canada's reliance on the U.S. as a destination for its oil is driving down the price and that getting more oil to coastal ports to be shipped overseas is critical. Indigenous communities and B.C. residents on the coast fear the environmental risk of an oil spill from increasing shipments of diluted bitumen, which is still being studied to figure out exactly how best to clean it up.

Carr said the government has a "world class response" plan and is balancing the needs of the environment and the economy.

The Fraser Institute on Tuesday released a new report saying the lack of pipeline capacity, over-dependence on rail for transport, and reliance on the U.S. have cost Canada $15.8 billion in revenues this year. The calculation was based on the difference between Canadian and U.S. oil prices.

Mia Rabson, The Canadian Press