Kinder Morgan customers funding expansion application

Burnaby Mayor Derek Corrigan -
Burnaby Mayor Derek Corrigan
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Trans Mountain pipeline customers are funding Kinder Morgan's application to expand it, thanks to a National Energy Board (NEB) decision that makes the review process an unfair fight, says Burnaby city hall.

The city says in a press release that a study by economist and former ICBC CEO Robyn Allan found that in 2011 the NEB approved a $1.45-per-barrel surcharge on oil shipped through the existing pipeline between Edmonton and Burnaby.

That money, which now totals $136.3 million, was earmarked to fund the application. The company wants to almost triple the pipeline's capacity to enable increased exports of oil sands crude to overseas markets via tanker ships out of Burrard Inlet.

In the study, Allan calls the NEB's approval of the fee "precedent setting." She said it gave Kinder Morgan the ability to build a "regulatory approval process 'war chest'" so it could apply for the expansion at no risk to the company.

"It is Canadian businesses and consumers that ultimately fund the security for Kinder Morgan’s investors," she wrote, "but an equivalent mechanism, in scope or magnitude, is not available to people whose homes, schools and businesses are at risk from the proposed expansion."

The arrangement is "shocking and unfair," said Burnaby Mayor Derek Corrigan.

"The NEB approved this agreement in advance, and is now sitting in judgment of the resulting application. The NEB has authorized only $1.5 million dollars for all other intervenors. How fair is that?”

Corrigan said the integrity of the NEB is "seriously compromised here. It appears they have already made up their mind.”

Kinder Morgan Canada said in an emailed statement, "Development of a project such as the Trans Mountain expansion entails significant study and environmental and engineering work such that Kinder Morgan and its customers are collectively sharing the development cost risk for the project. The commercial terms for the project were previously approved by the National Energy Board."

The NEB did not respond to a request for comment before the NewsLeader's deadline.

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