Updates
April 20, 2018: in the original post, I noted that I might be misreading KMI/CEO's comments regarding the Trans Mountain pipeline. It appears that I had it pegged exactly right. From Irina Slav at oilprice.com --
Asked about whether funding from the government would ensure the Trans Mountain expansion, Kean said “They’re really two separate things. Most of the investment is in British Columbia, where the government is in opposition to the project ... That is an issue that, in our view, needs to be resolved.”
Alberta, by the way, is ready to buy the project and take it off Kinder Morgan’s hands. This option may have sounded far-fetched a week ago but now it is beginning to look increasingly like a legitimate solution to the problem the pipeline maker is facing.
I think the KMI Trans Mountain pipeline story is fascinating. I'm learning a lot about geography and the permitting process.
Again, can you imagine? Twelve hundred (1,200) provincial permits needed for this project; and 600 permits are yet to be submitted. Of those submitted, about half have been reviewed/approved. Twelve hundred permits -- that's absolutely ludicrous. Preposterous. Ridiculous.
A reader writes:
Yesterday's announcement by CEO of KMI at conference call that Alberta pipeline probably won't be built has set off an enlarging, volatile firestorm of statements (see headlines in graphic below).
Saskatchewan is planning on joining any future sanctioning targeting British Columbia.
Oil/gasoline restrictions are discussed.National politics in turmoil.
All this could be a tipping point in the decades-long anti-fossil-fuel drama.
With regard to the Saskatchewan position:
From the transcript, words from the CEO:
Now we're going to switch to KML. Last week, we announced that the KML had a decision point on the Trans Mountain expansion project. We announced the suspension of non-essential spending and that under current conditions we would not put additional KML capital at risk.
We also said there's no readthrough from this in terms of our willingness to invest in Canada. We have invested in Canada, British Columbia, as well as Alberta, and we expect to continue investing. But as we said then, it's become clear this particular investment may be untenable [ph] for a private party to undertake.
The events of the last 10 days have confirmed those views. We pointed out there are significant differences between governments, those differences are outside of our ability to resolve. We are continuing our stakeholder discussions between now and May 31 and we're looking for a way forward on this project.
All of that is the same as what we said on the call last week, nothing new there.
However, discussions are underway and as the Prime Minister said on Sunday, we're not going to undertake those discussions in public and we do not intend to provide additional updates on the status of those until we reached a sufficiently definitive agreement or the discussions have terminated. So again, not much update, but discussions have commenced.
I may have misread the transcript, but it appears the CEO has two concerns with regard to the pipeline. One concern is the "tangible": process, permitting, financial, building, etc." The other concern is the "intangible."
If I read the transcript correctly, the CEO is concerned that even if the pipeline is built (the "tangible"), that is not the end of the story. If the people and the government of BC do not "buy into" the benefits of this pipeline, the "tangible" is at risk. Once built, the people and the government can "incrementally shut down this project" even after it's built. The "buy in" is the "intangible."
Here's the part of the transcript in which "two issues" are mentioned:
Yes, there are really two separate things. I mean, there needs to be a way, most of the project and most of the investment is in British Columbia where the government is in opposition to the project and has look for and found ways to incrementally regulate it. And that is an issue that, in our view needs to be resolved or addressed in order to be able to successfully construct in the province. And so we think of this two separate or related things.
I wrote back to the reader regarding my thoughts, again, not ready for prime time:
Another reader suggested I might be misreading previous comments/decisions by KMI, suggesting that the pipeline would not be built. That reader suggested that "payoffs" would be made to BC and after the province gets their "ransom," the province would okay the pipeline.
I see this as an ideological struggle -- that is partly why this is so fascinating. In my mind, this has become a "religion." It's not about money.
I wouldn't bet one way or the other that the pipeline will be bet, but I bet it's going to be a dirtier and nastier fight than folks realize. I think BC will dig in their heels even more.
I wish I could write better, articulate better how I see the world dividing up along ideological lines when it comes to fossil fuel. But as the reader says above -- this may be a real tipping point in the decades-long anti-fossil fuel drama -- at least for western Canada, and maybe Canada as a whole.
We will also see it in California. As long as gasoline stays below $4.50/gallon in California, residents there will "put up with it." But if gasoline were to hit, on a regular and long-lasting basis, $6 / gallon, I think that the "silent majority" might actually say "enough is enough."
Absolutely fascinating.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.