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Disappearance Of Saudi Journalist Could Rock Oil Markets

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Trans Mountain Shuts Down After Spill

Transmountain

Kinder Morgan has shut down the Trans Mountain oil pipeline after a flow meter at a pump station leaked about 100 liters of crude. The pump station is in Darfield, British Columbia and, according to the provincial environment ministry the leak has already been contained and should be cleaned up within ten days.

Minor as the spill was, it could have major implications for the future of Kinder Morgan’s plan to expand the Trans Mountain pipeline. The B.C. government is a firm opponent of the project as are environmentalists, although some B.C. First Nations, as well as local businesses, are just as firmly behind the expansion as they rely on it to create much-needed jobs.

This government opposition has put B.C. at odds with neighbor Alberta, which would be the main beneficiary of the expansion and led to an exchange of threats and legislative moves that has aggravated bilateral relations to a freezing point.

Although the federal government threw its weight behind the Trans Mountain expansion, it has not been very active in the B.C.-Alberta brawl, winning criticism from both sides. Now a deadline set by Kinder Morgan is approaching that would determine what happens next. The company has said it will drop the project if it does not receive guarantees it would go ahead as planned by May 31.

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While earlier, there was hope that if the federal government has approved the project, it will go ahead in spite of opposition, now, according to a Reuters report, doubts abound among investors, government officials, and oil industry players alike that the Trans Mountain expansion will see the light of day.

Now, amid these growing doubts, a minor spill would certainly heighten already high anti-pipeline feelings, which will only serve to strengthen Kinder Morgan’s belief there is too much risk in this project. Should it drop it, Alberta may have to make good on its promise to buy the project and take responsibility for making it happen.

By Irina Slav for Oilprice.com

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