Among other things, May wants to know why Ottawa handed Kinder Morgan $4.4 billion for an asset the Parliamentary Budget Office values at just $2.8 billion.
Buying an old (67 years old) and leaky pipeline in order to take over a private sector project that had hit the rocks was hardly smart. But overpaying for it to the extent that the Liberals did was an act of political desperation.
The news coverage downplays the reality that Ian Anderson, CEO of Trans Mountain Corp., the Crown corporation in charge of the project, happens to be the former president of Kinder Morgan Canada. Trans Mountain’s parent, Canada Development Investment Corporation, bought Kinder Morgan’s assets with a $5.2 billion loan from Export Development Corporation. This was considered a “non-budgetary transaction.” As such, it did not need to be a line item in Finance Minister Bill Morneau’s budget. Nor did it need to be debated or voted by Parliament.May says the signs were obvious that Kinder Morgan had no interest in building the new pipeline.
Instead of heeding those signs, the Liberals paid a price exceeding the old pipeline’s value in order to take on a project that Kinder Morgan had clearly decided would not fly.
The Liberals wanted more than anything to prove they could get the pipeline built. One can only imagine the glee of the Texas oil men when they realized they could sell the old pipeline for nearly twice what it was worth.
When Kinder Morgan kidnapped its own project to demand a guarantee — or else — they were not looking for ransom. They wanted to shoot the hostage. Being able to blame a third party when they abandoned the project could avoid penalties under long-term contracts Kinder Morgan had signed.
But the reckless behaviour with public funds does not end with the announcement in May 2018 that the Government of Canada was buying the pipeline for $4.4 billion.
On Aug. 30, 2018, the Federal Court of Appeal struck down the pipeline permits ruling that not only did the Liberal government violate Indigenous rights leading to the quashing of the permit, Kinder Morgan itself violated indigenous rights. In other words, the vendor contributed to the devaluing of the asset, and we should never have paid $4.4 billion without re-negotiating the price.
Yet, without any explanation, Finance Minister Bill Morneau cut a cheque for $4.4 billion to Kinder Morgan the very next day, Aug. 31, with no closing date for purchase and sale of the pipeline.
We overpaid not once, but twice.
What is most galling to me is that our public funds are being used to brow-beat First Nations along the route into signing benefit agreements. One elected council member of a First Nation that is fighting the project told me recently that they are being “bombarded” by the now government-owned Trans Mountain with offers of millions of dollars to agree to the project.
Those are public dollars being used to coerce acceptance of a project most Indigenous nations do not want to accept. And yet every time a First Nation accepts a benefit agreement, politicians celebrate it claiming Indigenous people want the project. That is the case in some instances, but it seems like the latest form of oppression and colonialism: Refuse to listen to Indigenous objections, convince people the project is inevitable and use our money to bribe and coerce.The Big Lie.
The Trans Mountain pipeline remains a project outside market forces. The arguments for it rest on misconceptions and propaganda. It will not get a higher price at “tidewater.” Bitumen is inevitably expensive to produce with low value in the marketplace. As the carbon bubble bursts, these expensive “assets” will be the first to be stranded — uneconomical and unusable. Pursuing it blows our Paris commitments while squandering public funds.
It is not too late to ask the question: what could be done with the further $13 billion? Could we not do more for the Alberta economy in cleaning up toxic abandoned wells and mines, as well as tailings ponds in northern Alberta? Could we not fund green and renewable energy? Ensure clean drinking water for every First Nation? Ensure we have an electricity grid to move 100% renewable energy from province to province?
How much is too much? In my view, a single penny more is too much.The government has a lot of explaining to do. Why did it so grossly overpay the Boys from Enron for a pipeline they were desperate to unload? Why did it manipulate the pipeline approval process, calling senior public servants into a room and telling them to endorse it? Why has the government never produced "the science" it claims to have showing dilbit to be safe? Where are these eager Asian markets for bitumen, markets willing to pay vastly more than world oil price for our high-carbon, hard-to-process, low-value sludge? How will the end use of these high-carbon products impact the climate and our hopes of averting climate catastrophe? What is plan B if bitumen becomes a "stranded asset"? When and how are they going to clean up the ticking time bomb of the Athabasca Tar Sands tailing ponds that threaten to turn the Mackenzie River watershed into a giant Love Canal?
When will they come clean to the Canadian people?
8 comments:
Breaking
John Baird will not run for the Conservative leadership
As you were, nothing to see here.
Well, it looks as though May finally caught up to your and others position on TM of almost 21 months ago, the day the deal was announced.
She's been slowing up quite a bit recently. And as for a successor, diddly squat. Not a soul with the get up and go to take the Green Party on as a concern.
The Dippers are out to perpetual lunch despite Holmstrom's imaginings to the contrary (like, where is Jagmeet, anyway?), and provincially Horgan is as good a Blairite-style neoliberal fake social democrat as Notley was next door. "LNG, bring it on, baby! Get those natives outta my way, we're coming through!" Seeing as the BC Greens prop up Horgan, I have to assume they're not really green and as useless as anyone from the major parties. Weaver's off on a farewell tour or something -- don't the three MLA's constituency people not rag on them for supporting LNG, or have they all been "turned" somehow? They're certainly not acting like Greens, anyway.
BM
Who owns Canada? There is a common belief that it is the energy sector but I think it's the bankers. When the elder Trudeau started borrowing from commercial banks instead of the Bank of Canada we were hooked.
Trudeau often looks scared, like a deer in the headlights. He has to face the cameras and tell porkies; he knows he's lying and he knows we know and he does it anyway hoping his supporters will look away. Someone has a very large thumb on him.
Trans Mountain will supply the same amount of bitumen as is used in the world paving industry, about 700 million barrels a year. As bitumen it is already suitable for use as pavement.
Teck will supply enough feed stock for the world plastics industry (about 2 million barrels a day), initial cracking of bitumen yields naphtha, a primary feed stock for plastics.
Instead of leaving it in the ground, we would be leaving it on the ground, or slightly above ground in the case of plastic. If we don't burn it, then it does not release CO2.
We tend to think of Government and it's employees as professionals beyond reproach.
At the end of the day they are human and humans make stupid mistakes .
I an effort to appease Alberta I think it reasonable to suggest that the Liberals were panicked in to the purchase of KM.
Unfortunately the Liberals like the Conservatives before them have no long term vision of either Canada or our place in the world.
This lack of vision and often experience leaves them open to manipulation by their wealthy and influential backers.
That said, maybe I am in just kind hearted mood?
TB
Same thing can be said about Coastal GasLink.
BM, I hope the Greens can rise to the occasion. If not now, when? As for the NDP, it's infuriating that the go all green during election campaigns only to show their true colours right afterwards.
Sort of like electoral reform. Horgan agreed to it but, in the runup to the referendum, did squat to support it. The government's duty was to help inform the public on the pros and cons of every option. It was apparent that if the government just laid low the referendum would be lost.
Toby, in my day sovereignty could pass from one state to another in only two ways - when it was ceded by treaty or lost by conquest.
My ex-father in law was an ADM in Indian and Northern Affairs. From him I learned that BC, as a condition of joining Confederation, demanded that it retain the exclusive right to negotiate land deals with the province's First Nations. Then it basically did nothing. It was even known to designate mountain peaks as reserves. The end result is that territory, such as the Wetsuweten lands remain sovereign.
Back when the Mohawks rose up, they too had sovereignty assured by the British crown for their support in fighting Britain's enemies. They have it all in writing.
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