Canada to buy major pipeline to ensure it gets built

Finance Minister Bill Morneau and Natural Resources Minister James Carr speak at the National Press Theatre during a press conference in Ottawa on Tuesday, May 29, 2018. (Sean Kilpatrick/The Canadian Press via AP)
A crane operates at Kinder Morgan's Trans-Mountain marine terminal, in Burnaby, British Columbia, Canada, Tuesday, May 29, 2018. Canadian Prime Minister Justin Trudeau's government announced plans Tuesday, May 29, 2018, to spend US$3.4 billion to purchase Kinder Morgan's Trans Mountain pipeline. (Jonathan Hayward/The Canadian Press via AP)
Natural Resources Minister James Carr and Finance Minister Bill Morneau leave a cabinet meeting on route to the National Press Theatre in Ottawa on Tuesday, May 29, 2018. Finance Minister Bill Morneau says Canada is going to buy the Trans Mountain pipeline and all of Kinder Morgan Canada's core assets for $4.5 billion. (Sean Kilpatrick/The Canadian Press via AP)
Green Party Leader Elizabeth May looks on as Finance Minister Bill Morneau and Natural Resources Minister James Carr speak at the National Press Theatre in Ottawa on Tuesday, May 29, 2018. The federal Liberal government is spending $4.5 billion to buy Trans Mountain and all of Kinder Morgan Canada's core assets, Finance Minister Bill Morneau said Tuesday as he unveiled the government's long-awaited, big-budget strategy to save the plan to expand the oilsands pipeline. (Sean Kilpatrick/The Canadian Press via AP)
Prime Minister Justin Trudeau arrives for an early morning cabinet meeting on Parliament Hill in Ottawa on Tuesday, May 29, 2018. (Sean Kilpatrick/The Canadian Press via AP)
Finance Minister Bill Morneau reacts to questions at the National Press Theatre during a press conference in Ottawa on Tuesday, May 29, 2018. The federal Liberal government is spending $4.5 billion to buy Trans Mountain and all of Kinder Morgan Canada's core assets, Finance Minister Bill Morneau said Tuesday as he unveiled the government's long-awaited, big-budget strategy to save the plan to expand the oilsands pipeline. (Sean Kilpatrick/The Canadian Press via AP)
Alberta Premier Rachel Notley high fives Finance Minister Joe Ceci at a press conference to speak about the Kinder Morgan pipeline project, in Edmonton on Tuesday, May 29, 2018. The federal Liberal government announced Tuesday that it will spend $4.5 billion to buy Trans Mountain and all of Kinder Morgan Canada's core assets. (Jason Franson/The Canadian Press via AP)
An oil tanker dwarfs an accompanying security vessel at Kinder Morgan's Trans-Mountain marine terminal, in Burnaby, British Columbia, on Tuesday, May 29, 2018. Canada's federal government said Tuesday it is buying the controversial pipeline from the Alberta oil sands to the Pacific Coast to ensure it gets built. (Jonathan Hayward/The Canadian Press via AP)
An oil tanker is moored at Kinder Morgan's Trans-Mountain marine terminal in Burnaby, British Columbia, Canada, Tuesday, May 29, 2018. Canadian Prime Minister Justin Trudeau's government announced plans Tuesday, May 29, 2018, to spend US$3.4 billion to purchase Kinder Morgan's Trans Mountain pipeline. (Jonathan Hayward/The Canadian Press via AP)
An oil tanker is moored at Kinder Morgan's Trans-Mountain marine terminal in Burnaby, British Columbia, Canada, Tuesday, May 29, 2018. Canadian Prime Minister Justin Trudeau's government announced plans Tuesday, May 29, 2018, to spend US$3.4 billion to purchase Kinder Morgan's Trans Mountain pipeline. (Jonathan Hayward/The Canadian Press via AP)

TORONTO — Canada's federal government said Tuesday it is buying a controversial pipeline from the Alberta oil sands to the Pacific Coast to ensure it gets built.

Prime Minister Justin Trudeau's government plans to spend $4.5 billion Canadian (US$3.4 billion) to purchase Kinder Morgan's Trans Mountain pipeline.

The pipeline expansion would triple the capacity of an existing line to ship oil extracted from the oil sands in Alberta across the snow-capped peaks of the Canadian Rockies. It would end at a terminal outside Vancouver, resulting in a seven-fold increase in the number of tankers in the shared waters between Canada and Washington state.

Facing stiff environmental opposition from British Columbia's provincial government and activists, Houston-based Kinder Morgan earlier halted essential spending on the project and said it would cancel it altogether if the national and provincial governments could not guarantee it.

"It must be built and it will be built," Finance Minister Bill Morneau said.

The pipeline would allow Canada to diversify and vastly increase exports to Asia, where it could command a higher price. Canada has the world's third largest oil reserves but 99 percent of its exports now go to refiners in the U.S., where limits on pipeline and refinery capacity mean Canadian oil sells at a discount.

"For too long we have relied on one trading partner for our oil and gas exports," Natural Resources Minister Jim Carr said.

The project has pitted oil-rich Alberta against coastal British Columbia, where concerns about fisheries, real estate values, tourism and ocean ecology are high. Vancouver Mayor Gregor Robertson calls the pipeline an unacceptable risk that threatens 10,000 jobs in the harbor.

Indigenous leaders and environmentalists have pledged to do whatever necessary to thwart the pipeline, including chaining themselves to construction equipment. "If it means standing up for the land against bulldozers or the military, we have to do that," Union of British Columbia Indian Chiefs spokeswoman Chief Judy Wilson said aboriginal

The Trans Mountain expansion is projected to lead to a tanker traffic balloon from about 60 to more than 400 vessels annually as the pipeline flow increases from 300,000 to 890,000 barrels per day.

Morneau called the purchase an "exceptional situation" and said the government doesn't intend to be a long-term owner of the pipeline. The government is buying the existing pipeline and the scheduled twinned pipeline expansion. The federal cabinet approved the purchase on Tuesday.

Steve Kean, chairman and chief executive of Kinder Morgan Canada Ltd., said the deal represents the best opportunity to complete the expansion project. "We've agreed to a fair price for our shareholders and we've found a way forward for this national interest project," he told a conference call with financial analysts.

Analysts have said China is eager to get access to Canada's oil, but largely gave up hope that a pipeline to the Pacific coast would be built.

Trudeau approved the expansion, arguing that it was "economically necessary" and enabled him to overcome opposition to a carbon tax plan that will help Canada cut its greenhouse emissions.

But many indigenous people see the 620 miles (1,000 kilometers) of new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the U.S. Many in Canada say it also raises broader environmental concerns by enabling increased development of the carbon-heavy oil sands.

More than 200 people, including two members of Parliament, have been arrested already at Kinder Morgan's oil tanker and terminal site in Burnaby, British Columbia.

British Columbia Premier John Horgan said he's worried about the "catastrophic consequences" should there be a spill, regardless of the owner, and will continue to fight it in court.

Alberta Premier Rachel Notley cheered the news of the federal government's purchase on Twitter. "This project has more certainty than ever before. We won't stop until the job is done!"

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