A political earthquake hit B.C. on Monday, with the NDP and Greens announcing an alliance to form a new minority government. For the first time in North American history, a social democratic government appears set to assume power thanks to the backing of the Greens. For Kinder Morgan, the timing could not have been worse. The news came on the eve of the pipeline giant’s IPO to help finance its Trans Mountain expansion project, which would drastically increase the amount of Alberta tar sands bitumen shipped to the west coast for export.
On Tuesday, as shares started selling on the TSX, the historic deal between the Greens and the social democrats was made public after being ratified by members of the NDP caucus.
For Kinder Morgan, it’s a grim picture. The agreement pledges a new government will immediately “employ every tool available to … stop the expansion of the Kinder Morgan pipeline, the seven-fold increase in tanker traffic on our coast, and the transportation of raw bitumen through our province.”
The multinational company, headquartered in Houston, Texas, was founded by billionaire Richard Kinder, a former Enron executive and major financial contributor to Republican political campaigns. The proposed Trans Mountain expansion, or twinning, from Alberta to Burnaby, B.C. would increase the pipeline system’s capacity from 300,000 to 890,000 barrels per day.
Even before the details were known, it had become clear that Kinder Morgan’s pipeline plans had played a key, if not decisive, role in tipping the Greens toward working with the NDP rather than the Liberals. B.C. Green leader Andrew Weaver, speaking to the media Monday while flanked by premier-in-waiting John Horgan, leader of the B.C. NDP, strongly implied that the Liberals’ support for the tar sands pipeline was one of the primary considerations for the Green caucus.
War of words
The province’s powerful anti-pipeline movement wasted no time seizing the momentum. Early Monday morning, an activist climbed a flagpole at the provincial legislature in Victoria and put up a sign declaring victory.
Meanwhile, Prime Minister Justin Trudeau and Alberta Premier Rachel Notley took to the airwaves to pledge their loyalty to Kinder Morgan.
Notley took a particularly sharp tone. “Mark my words, that pipeline will be built, the decisions have been made,” Notley said in Edmonton.
When asked about Notley’s comments, Weaver fired back, “I suggest she look at Section 35 of the Constitution,” a pointed reference to the language on Indigenous rights that has been crucial to a series of historic court victories by First Nations in Canada.
Weaver, a leading climate scientist, was an intervenor at the National Energy Board hearings on Trans Mountain, and has in the past challenged Notley to a public debate on the pipeline.
Radical change demanded
Earlier on Monday, just prior to the announcement of the NDP-Green deal, the Union of B.C. Indian Chiefs issued a scathing open letter calling for a radical change in direction from the B.C. Liberal government’s relations with First Nations and handling of environmental issues:
Six years of a heavy-handed Clark majority government has left British Columbians deeply mired in an overwhelming debt, subsequent to a litany of highly outdated, unfeasible and environmentally destructive mega projects, including the Site C Dam, the Kinder Morgan Trans Mountain Pipeline Expansion Project and the fading market-dead LNG pipe dream. British Columbia’s economy has become reliant on an industry propped up by a temporary and transient workforce precariously perched on archaic notions requiring the complete destruction of our pristine air, land, and waters, and on an industry which runs roughshod over the democratic and human rights of Indigenous and non-Indigenous communities alike.
Prior to that, over the weekend, activists locked themselves down to block the entrance to Kinder Morgan’s terminal in Burnaby. Four of them were later arrested.
While the political war of words played out Tuesday, Kinder Morgan’s Canadian IPO had a rocky first day. According to a Canadian Press report,
The newly listed shares dipped to as low as $15.75 before recovering to close at $16.24, but still below the $17 they were priced at in their initial public offering.
At $1.75 billion, the IPO was on track to be the fourth largest in the Toronto Stock Exchange's history. Kinder Morgan said it fulfilled the final requirement for it to proceed with the Trans Mountain expansion.
The battle over Kinder Morgan’s Trans Mountain pipeline will continue to play out over the summer, with the company claiming it will be ready to put shovels in the ground by September. I know they have shares to sell, but, after the last couple days in B.C. politics, that kind of optimistic plan is looking more and more like a pipe dream.