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British Columbia outlines plans to halt Kinder Morgan's Trans Mountain pipeline

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British Columbia outlines plans to halt Kinder Morgan's Trans Mountain pipeline

British Columbia's recently elected government has unveiled a plan to halt construction of Kinder Morgan Inc.'s C$7.4 billion Trans Mountain pipeline expansion.

The two-pronged approach will involve legal challenges and the hold-up of provincial environmental approvals through consultations with Aboriginal groups. B.C. Environment Minister George Heyman said he believes it is doubtful the company could start construction in September on the project to almost triple the capacity of the line that connects the oil sands region in Alberta with a port near Vancouver. He conceded that the company could begin work on private and federal government-controlled lands in province.

"Until these consultations are completed in a way that meets B.C.'s legal obligations, work on this project on public lands cannot proceed," Heyman said. "The Environmental Assessment Office has advised me that such consultations on the environmental management plans which the company was required to prepare as part of the Environmental Assessment are still outstanding."

Kinder Morgan is reviewing the minister's comments, Ian Anderson, president of the company's Canadian unit, said in an emailed statement. "We are committed to working with the province and permitting authorities in our ongoing process of seeking and obtaining necessary permits and permissions,” he said.

British Columbia is currently governed by a coalition of socialist parties that ousted the ruling Liberal Party on June 29. The New Democratic Party and the Green Party hold a combined one-seat majority in the province's legislature. Both parties' campaigns included plans to halt the Trans Mountain expansion and review the under-construction Site C hydroelectric project.

In an Aug. 9 announcement, the British Columbia Utilities Commission said it is starting an inquiry into the approximately C$8.34 billion Site C project. The public and province-owned BC Hydro and Power Authority, which is building the project, has until Aug. 30 to make submissions. The regulator has hired consultant Deloitte LLP to provide independent data and analysis. It is expected to release its interim report Sept. 20 and submit a final report to the government Nov. 1.

Kinder Morgan completed a C$1.75 billion initial public offering of its Canadian assets May 30 that includes Trans Mountain. The shares were down 59 Canadian cents to C$17.35 as of 2:27 p.m. EDT on Aug. 10, 35 Canadian cents above their IPO price. The expansion would see some of the Eisenhower-era pipeline twinned and old sections reactivated to boost capacity to 890,000 barrels per day from about 300,000 bbl/d. It also includes plans to expand a marine terminal that would increase tanker traffic around British Columbia's populous Lower Mainland region.

British Columbia has hired retired Judge Thomas Berger to head its legal challenges to the Trans Mountain expansion approval. The 84-year-old Berger is known for heading a federal inquiry four decades ago on the construction of a natural gas pipeline from the Northwest Territories to the North American pipeline grid. His findings led to a 20-year moratorium on the construction of the line. The proposed conduit has been revived several times but was never built. Berger will seek intervenor status for British Columbia in ongoing court actions against the line.

"It's our desire to seek intervenor status in the legal challenges to federal approval of the pipeline and tanker expansion," Heyman said at an Aug. 10 news conference. "Mr. Berger will provide legal advice on our options for taking part in these legal challenges. The hearings are scheduled to begin in federal court later this fall."

Kinder Morgan has already obtained a federal permit to build the line and reached benefit agreements with Aboriginal groups along the line that include cash payouts. Prime Minister Justin Trudeau has vowed to see the line proceed because his government has determined it is in the national interest. It is unclear if British Columbia as a junior government can overrule the federal government with local laws. Heyman said the government will seek to engage the Aboriginal groups whose finances are threatened by the government's action. British Columbia will use its mandate to consult with Aboriginal groups and approve compliance with a provincial environmental assessment to stymie planned construction, he said.

"We are committed to ensuring that our legal duty to consult meaningfully with indigenous people is maintained at every step of this process," Heyman said. "That includes insuring that this project meets the requirements regarding any potential impacts on Aboriginal rights and title."