Kinder Morgan Restarts Route Approval Process as Opposition Mounts
Kinder Morgan, the company behind the embattled Trans Mountain pipeline expansion, has hurt its own cause with a series of “basic process gaffes” that will delay the National Energy Board’s review of the company’s detailed route for the project, Chilliwack, B.C.-based WaterWealth Project contends in a news advisory released yesterday.
“This new development gives concerned citizens 30 days after Kinder Morgan publishes new notices for each route segment to drum up and consolidate opposition,” said WaterWealth Program Director Ian Stephen. “Kinder Morgan is not only struggling to find investors for its $7.4-billion pipeline, it’s now struggling to find an acceptable route through British Columbia.”
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Kinder Morgan began the regulatory process for getting its pipeline route approved last December 9, less than two weeks after Prime Minister Justin Trudeau gave the project a green light. “Under section 36 of the National Energy Board Act, the Board will not approve the route of a pipeline until it has taken into account all written statements and representations made at public hearings ‘in order to determine the best possible detailed route of the pipeline and the most appropriate methods and timing of constructing the pipeline,’” WaterWealth explains.
But Kinder made mistakes in filing public notices for different sections of the pipeline, leading to several motions to the NEB asking for extended deadlines. The Board gave Kinder until May 15 to respond, and on Monday the company announced it would republish its notices for the entire route.
That decision “effectively restarts the detailed route process,” WaterWealth states, “with new 30-day periods following publications on all segments of the route for statements of opposition, and hearings pushed back until the Board can assess statements filed in the new period, in addition to the hundreds already filed.”
Despite logistical challenges with the NEB’s online filing process, WaterWealth says 356 objections have already been lodged, more than half of them from Chilliwack. The inventory includes “statements from the City, the Chamber of Commerce, local First Nations, and almost 200 individual residents. All are calling for the route to be changed to protect the source of drinking water for some 86,000 residents and businesses.” Now, Stephen notes, the effort to mobilize opposition along the route enters a new phase.
Timing matters for Kinder Morgan, with analysts pointing to rising project costs and regulatory delays as factors that could imperil the project. “The pipeline’s customers have the ability to back out of their contracts, or renegotiate rates with Kinder Morgan, if the cost goes over $6.8 billion or the regulatory approval is pushed past the end of 2017,” analyst David Alton Clark on the Seeking Alpha investment site warned in January.
And if the pipeline failed altogether, “the cancellation of the Trans Mountain project would essentially be a death knell” for the Houston-based pipeline giant.
Since then, Kinder has admitted the project will likely break through its cost ceiling, but claimed shippers are still lining up to book capacity on the pipeline.