Ottawa has tapped one-time Northern Gateway head John Carruthers to conduct due diligence on the Trans Mountain pipeline assets and to advise a newly formed Crown corporation as it assumes responsibility for the expansion project.
The Canada Development Investment Corporation has retained Mr. Carruthers as a contractor as part of efforts to ensure construction of the $7.4-billion Trans Mountain expansion resumes shortly and is completed, a Finance Canada spokeswoman said.
Ottawa is buying the existing Trans Mountain line and taking over the expansion in a $4.5-billion deal announced last month after proponent Kinder Morgan Inc. signalled it would abandon the project amid regulatory uncertainty and protests.
“The government is engaging the assistance of expert advisors in financial, legal and technical matters, and working with investors to transfer the project and related assets to a new owner or owners, in a way that ensures the project’s construction and operations will proceed in a manner that protects the public interest,” the spokeswoman, Jocelyn Sweet, said in an e-mailed statement.
The move to hire a veteran industry executive suggests the federal government is establishing a team to oversee and manage the pipeline and expansion project for longer than planned, despite assurances to the contrary.
Mr. Carruthers, an executive fellow at the University of Calgary’s School of Public Policy, oversaw the $7.9-billion Northern Gateway project for Enbridge Inc. for more than a decade.
A key aspect of the Gateway project was Indigenous ownership, with communities along the route taking a one-third equity stake. Before joining Enbridge, Mr. Carruthers was a vice-president with oil giant BP PLC. In that job, he was responsible for environmental studies, First Nation participation and land acquisition on a US$20-billion natural gas pipeline in Alaska. He did not immediately respond to a request for comment on Thursday.
Gateway, designed to have the capacity for 525,000 barrels a day, was conceived more than a decade ago to connect Alberta’s then-booming oil sands to a supertanker port at Kitimat, B.C., with an eye to tapping fast-growing Asian markets.
But the project was fiercely opposed by environmentalists and coastal First Nations, foreshadowing the current clashes over Trans Mountain.
The federal Liberal government quashed the Enbridge project in November, 2016, after a federal court ruled more consultation with Indigenous groups was required.
At the same time, Ottawa approved Trans Mountain and another Enbridge project called Line 3. The Liberals have since moved to formalize a ban on oil-tanker traffic on British Columbia’s northern coast, pleasing environmentalists but drawing the ire of energy-industry executives who view the restrictions as short-sighted.
The stalled Trans Mountain expansion would nearly triple oil shipments to 890,000 barrels a day to an existing port in the Vancouver suburbs and is seen as key to oil-industry export hopes.