• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
Celebrating our 1,000th edition. The climate news you need
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  FEATURED
EXCLUSIVE: Hydrogen is Up, Pieridae is Out as German Chancellor Preps for Canada Visit August 15, 2022
Historic Climate Bill Passes U.S. House, Goes to Biden for Signature August 15, 2022
BREAKING: U.S. Senate Passes Historic $369B Climate Package August 7, 2022
Researchers Point To ‘Dangerously Unexplored’ Risk of Global Climate Catastrophe August 2, 2022
Koch Network Pressures Manchin, Sinema as Advocates Praise ‘Game Changing’ Climate Deal August 2, 2022
Next
Prev

Buying Trans Mountain Would End Badly for Brookfield, Analyst Warns

February 12, 2020
Reading time: 3 minutes
Primary Author: Mitchell Beer @mitchellbeer

PIPELINE_MANAGER/wikimedia commons

PIPELINE_MANAGER/wikimedia commons

61
SHARES
 

It would be a serious error for Toronto-based Brookfield Infrastructure Partners to invest in the Trudeau government’s troubled Trans Mountain pipeline expansion, a leading energy and finance analyst warned yesterday, after a news report identified Brookfield as a potential “dark horse” buyer for the project.

Brookfield, which has been building a profile as a green infrastructure investor, would run “significant risks” if it acquired the pipeline, U.S. investment banker Tom Sanzillo, finance director at the Institute for Energy Economics and Financial Analysis (IEEFA), told The Energy Mix in an email. “At the current levels of government exposure, this transaction would not be viable for a private equity investment.”

Sanzillo was reacting to a Bloomberg news report that identified Brookfield as “one unexpected suitor” for the pipeline, just days after Ottawa admitted the project had gone over budget by 70%—or 133%, compared to the first estimated released by its original proponent, Kinder Morgan, in 2014. The price tag now stands at C$12.6 billion, not including the $4.5 billion the federal cabinet shelled out to buy the pipeline on taxpayers’ behalf.

Bloomberg cited a report Monday by Ian Gillies, an analyst at Stifel FirstEnergy, that pointed to Brookfield’s “excellent access to capital markets” and proven ability to manage energy infrastructure assets as factors that would put it in the running to buy TMX, along with pipeliners TC Energy, Enbridge, and Pembina Pipeline Corporation, and several Indigenous consortia.

Brookfield spokesperson Claire Holland said the company doesn’t comment on speculation.

To make any deal at all plausible, “Brookfield would need the government to sell the pipeline and all for an amount substantially below Canada’s outlay, which will probably reach $20 billion (purchase price plus construction plus interest and carrying losses),” wrote Sanzillo, a former deputy comptroller for the State of New York. Even that kind of financial concession would merely “move the investment needle from an outright reckless investment to a very speculative one for Brookfield, and at a considerable financial loss for Canadian taxpayers.”

And even if Ottawa decided to write off its losses in (what it defines as) the public interest, “it remains to be seen if Brookfield or anyone could make a go of this project,” he told The Mix. “Global oil markets are weak, and the Canadian oil sands are a weak link in this equation.”

Sanzillo also addressed the optics of a company with a growing portfolio of successful renewable energy investments suddenly taking a U-turn back into the fossil fuel era.

“Brookfield has earned a reputation in the field of renewable infrastructure investments,” he wrote. “It is clear that this energy transition requires us to have double vision and understand that both a fossil fuel economy and ‘green’ economy exist today. But why this fossil fuel deal now? The financial risk of failure is high, and the reputational downside for the company is certain.”



in Canada, Community Climate Finance, Ending Emissions, Energy Politics, Pipelines / Rail Transport

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

Jay Cross/flickr
Auto & Alternative Vehicles

New Fee Model Would Turn Licence Bureaus into ‘Climate Champions’

August 17, 2022
1
TGEGASENGINEERING/Wikimedia Commons
Energy Politics

EXCLUSIVE: Hydrogen is Up, Pieridae is Out as German Chancellor Preps for Canada Visit

August 15, 2022
748
/Pikist
United States

Historic Climate Bill Passes U.S. House, Goes to Biden for Signature

August 15, 2022
221

Comments 4

  1. Fraser Liscumb says:
    3 years ago

    The ignorance seen in this article I understand as it attached to 20th-century formal training and with it reminds me of the day i entered the workforce at 18 and few all during my education I was told if what to be anyone you have to have money or be in a place of influence.. Never graduated college, but I spent a career being the one that hears the same words We do not understand what you do or how you do it but would you go see if you can address the problem. We have a limited or no budget, the reason, the formally trained had blown it and had failed and was now walking away saying their was no solution but willing to try if they had more money and I had no authority to do anything. it always came down to the same problem. 20th-century Silo thinking that money and self-interest was the only thing of value and they both lack the ability to apply innovation and collaboration to create a solution that was in everyone’s best interest. but more important in the best interest of the community and I got to open the world to sustainable change. By understanding economic and business 101 principles. At some time someone has to reinvest the disposable cash into projects that can make a difference but going to take a long time to recover the investment but the benefits out way the negatives due to the domino effect in the communities.

    Reply
  2. Fraser Liscumb says:
    3 years ago

    Know if you want a really stupid investment is the new open mine in Alberta, Several Albertian have said if the Liberal do not improve it due to environmental lobbying Alberta should leave and gone the U.S. . Every province should have freedom of choice. Atlanta was an example they should have freedom of choice in fishing. Interesting to note in the U.S there was a community that went from boom to bust, millions invested; tourists wanted to go for a holiday for a long time. The state over was doig big business supplying everything they needed to feed hundreds of thousands, the business community was booming. Why did it go bust. The state over did not have any environmental laws but like the new revenue . Soon the river flowing several hundred miles away but into the lake, the community was on turn toxic and 50 yrs after its a dead zone for miles. Then we have the Atlantic example. Freedom of choice and how the fish struggling to recover even with all the rules in place. ignorance attached to investment just starting to realize screw the environment up bad enough and money going to have next to no value. The only question worth asking are you ignorant or is money and self-interest the only thing of value.

    Reply
  3. Bill Henderson says:
    3 years ago

    Right after the news came out about TM construction costs zooming to $12 billion, Finance Minister Morneau insisted that the government would sell TM back to investors at the right time but I think many questioned who would that be.

    How about First Nations?
    https://business.financialpost.com/pmn/business-pmn/morneau-outlines-plans-for-investment-talks-on-trans-mountain

    Who knew that as well as pipelines being built to pay for the transition to renewables that they were also part of a reconciliation strategy too. Those shrewd, well positioned financially FN investors.

    BTW, The PM is increasingly looking like a deer in the headlights. Everything seems to be coming up lose-lose as concern about climate increases. Maybe the strategy of balancing the economy and the environment in a petrostate wasn’t a particularily good political strategy considering Hothouse Earth.
    https://www.straight.com/news/1164161/justin-trudeaus-grand-bargain-big-oil-exposed-donald-gutsteins-big-stall

    Reply
  4. David Wilson says:
    3 years ago

    I’m sure Jason Kenney would go all-in on a pipiline! He could use all the O&G royalties in the AB Heritage fund… Oh, wait….

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

TGEGASENGINEERING/Wikimedia Commons

EXCLUSIVE: Hydrogen is Up, Pieridae is Out as German Chancellor Preps for Canada Visit

August 15, 2022
748
Brocken Inaglory/wikimedia commons

State-Wide Megastorm Driven by Global Heating Could Drench California for a Month

August 15, 2022
437
/Pikist

Historic Climate Bill Passes U.S. House, Goes to Biden for Signature

August 15, 2022
221
Vinaykumar8687/WikimediaCommons

Solar On Track for ‘Staggering’ 30% Growth This Year

August 15, 2022
157
UK Black Tech/wikimedia commons

U.S. Tech Workers Leaving High-Paying Jobs to Focus on Climate Crisis

August 15, 2022
122
United States Marine Core/Wikimedia Commons

Distributed Energy Gains Ground With Mobile Microgrids, Vehicle-to-Grid Technology

August 15, 2022
114

Recent Posts

Steve Jurvetson/flickr

The Other Kind of Climate Change: Even a ‘Limited’ Nuclear War Would Trigger Starvation, Kill Billions

August 15, 2022
2
U.S. Fish and Wildlife Service

Arctic Warms 4 Times Faster than Global Average, Surpassing Estimates 

August 15, 2022
116
rawpixel

Common Medications Foil Body’s Ability to Cope with Hot Weather

August 15, 2022
92
Max Pixel

Slashing Nitrogen Dioxide Pollution Can Improve Crop Yields, Study Finds

August 15, 2022
50
David Hawgood/Geograph

E-Bikes a ‘Faster and Fairer’ Emissions Solution than Electric Cars

August 15, 2022
103
U.S. Fish and Wildlife Service Northeast Region/wikimedia commons

Researchers Study Carbon Loss, Forest Impacts of Northwest Territories ‘Zombie Fires’

August 15, 2022
23
Next Post
An Edinburgh tram: Handy for moving around

Cities turn to freewheeling public transport

The Energy Mix

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Navigate Site

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Follow Us

No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}