Three complaints about pipeline bail out

Three complaints about pipeline bail out

I have three general complaints about the Kinder Morgan bailout:

I have three general complaints about the Kinder Morgan bailout:

1. “The project became too risky for a commercial entity to go forward with it; that’s what Kinder Morgan told us.”

“We are going to ensure that it gets built so that we can get our resources to new markets.” – Justin Trudeau

What are the chances that Justin, a part- time drama teacher and white-water raft guide, can properly and successfully manage and evaluate risk in a project of this magnitude and complexity?

When the big boys say it’s risky, it’s time to step back.

2. Where is the demand? We are told that we’ll get more money in Asia.

Calgary Herald: “During the first quarter, the Calgary-based company didn’t produce almost 17,000 barrels of oil due to the widening price differential between benchmark West Texas Intermediate crude and Western Canadian Select heavy oil.”

Doesn’t supply and demand mean anything any more?

Price is set at the Gulf Coast refineries. Refining dilbit is more expensive, and it leaves a lot of waste behind. That is always going to be reflected in the price paid for the raw material.

3. Who will buy it, and at what price? Mexico tried to sell Heavy Mayan crude to the Chinese… and found that the hated gringo in Houston was willing to pay more. Why would China make an exception in our case? The whole pipeline proposal is based on the pipe dream that some Asian Santa Claus is going to pay Alberta more than the world price for a poor quality product that has to be shipped in smaller tankers across the Pacific ocean.

Are the Chinese really that bad of businessmen?

I don’t think so.

Richard Smiley

Salmon Arm Observer

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