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B.C. Legal Action Could ‘Break Kinder Morgan’s Will’: CBC

The British Columbia government’s decision to join the multi-pronged legal fight against Kinder Morgan’s Trans Mountain pipeline expansion could be the straw that breaks the camel’s back, CBC News reports, in an analysis that followed last Thursday’s announcement.

“The announcement didn’t guarantee the project would proceed or fail—but it was another step in the saga that is now several years in the making,” the national broadcaster notes. “The NDP, for all its rhetoric, can’t legally block the project if the courts ultimately rule that consultation has been adequate.” But “by placing more regulatory and legal straws on the camel that is the Trans Mountain pipeline, they could eventually break the will of Kinder Morgan to see the project through.”

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The strain was evident last week in the Houston-based pipeliner’s reaction to what it called the “unprecedented level of scrutiny and review” the project has received. Kinder Morgan Canada President Ian Anderson maintained the company is still “committed to working with the province and permitting authorities in our ongoing process of seeking and obtaining necessary permits and permissions.”

But CBC points back to the risk disclosures that accompanied the company’s $1.75-billion initial public offering (IPO) in May, in which it acknowledged that “changes in government, loss of government support, public opposition, and the concerns of special interest groups and non-governmental organizations may expose the Business to higher costs, delays, or even project cancellations.”

The IPO also stated that “the failure by the Business to resolve issues relating to Aboriginal rights and title and the Crown’s duty to consult could have a material adverse effect on the Trans Mountain Expansion Project and/or the Business,” CBC notes. In his statement Thursday, B.C. Energy and Climate Minister George Heyman threw the brakes on five of Kinder Morgan’s eight environmental management plans on the basis that the company’s consultations with First Nations had been inadequate.

“Until that has been completed,” he said, “Kinder Morgan, with the exception of some private land and some clearing of right-of-way, cannot put shovels in the ground.”

All of which maps back to an IPO prospectus that admitted to massive business risk for investors in the C$7.4-billion project. “It’s a rare dose of honesty from a company with a history of bending the truth,” the Dogwood Initiative’s Kai Nagata wrote at the time. “A mandatory risk analysis accompanying the share offering makes clear how difficult it will be to start construction. Provincial politics, lawsuits, blockades by First Nations—any one of these could kill the Trans Mountain pipeline project, the company admits.”

So far, CBC notes, Kinder Morgan maintains that construction on the pipeline expansion will begin in September. The company “has always publicly expressed confidence in the project,” notes online reporter Justin McElroy, “but it’s certainly made wiggle room to back out if the script continues along its current path.”