If pipeline continues regulatory hurdles and uncertainty, project may become “untenable”
The Trans Mountain Expansion Project(TMEP) continues to make progress on approvals from the NEB, government of BC and government of Alberta, according to a Kinder Morgan press release.
However, as of the end of 2017, even with this progress, TMEP has yet to obtain numerous provincial and municipal permits and federal condition approvals necessary for construction.
As a result of the delays, Kinder Morgan is going with a “primarily permitting strategy” to mitigate risk, with its 2018 budget focused primarily on advancing the permitting process – rather than spending at full construction levels – until they have greater clarity on key permits, approvals and judicial reviews.
On Dec. 4, 2017, KML announced that TMEP had made incremental progress during 2017 on permitting, regulatory condition satisfaction and land access. However, the scope and pace of the permits and approvals received to date does not allow for significant additional construction to begin at this time.
“In the fourth quarter, the Trans Mountain Expansion Project (TMEP) received a favorable ruling from the National Energy Board (NEB) with respect to certain permits in Burnaby,” said KML Board Chairman and CEO Steve Kean.
As a result, the previously announced unmitigated delay to a Sept. 2020 in-service date could extend beyond Sept. 2020, depending upon progress on regulatory, permit and legal approvals. KML now projects an unmitigated delay to a Dec. 2020 in-service date.
“We expect the NEB to issue another decision in the near future on establishing a fair, transparent and expedited backstop process for resolving any similar delays in other provincial and municipal permitting processes, but at this stage we are still pursuing a primarily permitting strategy for the project, and are now projecting an unmitigated delay to a December 2020 in-service date,” said Kean.
Kinder Morgan stated in both the Nov. 14 NEB motion, and in our Dec. 4, 2017 press release, if TMEP continues to be “faced with unreasonable regulatory risks due to a lack of clear processes to secure necessary permits . . . it may become untenable for Trans Mountain’s shareholders . . . to proceed.”
The NEB has not yet issued a decision on establishing a transparent and expedited backstop process for resolving any similar delays in other provincial and municipal permitting processes, which Kinder Morgan wants before construction can begin in earnest.
“We hear every day from our customers and other stakeholders about how critical this project is. We look forward to seeing further progress on regulatory approvals and judicial reviews and remain committed to delivering the project in an environmentally responsible way that respects our extensive and meaningful consultations with Indigenous Peoples, communities and individuals,” said KML President Ian Anderson.