Kinder Morgan president finds path to pipeline approval political

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Kinder Morgan Canada president Ian Anderson says he has learned a hard lesson travelling through British Columbia to explain his company's $5.4-billion Trans Mountain expansion: All pipelines, like politics, are local.

Kinder Morgan's plan for a huge expansion of its oil pipeline has become a central campaign issue for incumbent mayors in Vancouver and Burnaby, B.C., as they seek re-election on Nov. 15.

The controversial project – which would give Alberta oil sands producers access to Asian markets – would be federally regulated, but the municipal governments are against it, saying they want to defend the local environment.

Trans Mountain also loomed large in the last B.C. provincial election, with the NDP opposing it.

"I don't think we ever expected it to be easy," Mr. Anderson said in an interview.

"But nor did we expect, I think, the impacts and effects of political aspirations, election campaigns, to weigh in quite as heavily into that type of conversation."

Many in Canada's energy sector once wagered Kinder Morgan would have an easier time winning regulatory and public approval than Enbridge Inc. has experienced with its Northern Gateway proposal, which would also move large volumes of diluted bitumen to the West Coast.

One reason is that the expansion would follow a route already in use for an oil pipeline for more than six decades, and another is that it started its approval process later.

Mr. Anderson said the notion that he would sit back and quietly take notes while Enbridge became a lightning rod for controversy over environmental impact is too simplistic. Kinder Morgan has its own set of growing tensions.

"They're both pipelines to the West Coast, but we're in an urban environment. We have an existing right-of-way. We know the communities and the mayors and the chiefs that we impact, whereas they had to form new relationships," he said. "So the dynamic going in was quite different."

The regulatory process led by the National Energy Board began in August with gathering traditional knowledge from First Nations. The plan calls for nearly tripling the capacity of the Trans Mountain line between the Edmonton area and Burnaby to 890,000 barrels a day. The crude would be loaded onto tankers for shipment to international markets, which currently pay more than the industry's traditional markets, such as the U.S. Midwest.

Vancouver city council and Mayor Gregor Robertson opposed the project, saying they do not want the increase in oil-tanker traffic in Metro Vancouver's harbour. Meanwhile, it has become a central issue for Derek Corrigan, the popular long-term mayor of Burnaby. The city is the terminus of the pipeline and site of Kinder Morgan's Westridge marine terminal.

Lines of communication between Mr. Anderson and the mayors' offices are all but closed, and will likely remain that way at least until after the municipal votes, the executive said. In the case of Burnaby, there has been no interaction for a year.

Last month, the City of Burnaby sought, but was denied, a court injunction to stop preliminary work after Kinder Morgan survey crews cut down trees on Burnaby Mountain. The city said 13 were razed; the company said the number is seven. Mr. Corrigan said he would not back down from his opposition, asserting that "Kinder Morgan's actions to date represent the beginning of years of destructive work they propose to undertake in Burnaby."

"It's hard to tell, frankly, how much of it is politicking and political rhetoric and how much of it is the true reflection of the public opinion, and we struggle with that every day – trying to differentiate the two so that we can act accordingly," Mr. Anderson said. "When I'm asked about the mayor and his commentary in Burnaby, [I say] he's going to do what he thinks he needs to do. What I care about are the people in Burnaby and reaching out to them to make sure they're informed so they have something to balance off against the emotional rhetoric they're being served by the mayor."

When the planning began, he said he expected more discussion with the local officials about the effects of the project and how to minimize them, as well as how to boost economic returns locally.

"If we're successful [with regulatory approval], we're going to be having those discussions at some point. I'd rather be having them sooner than later," he said.