(Bloomberg) -- Canadian Prime Minister Justin Trudeau's government is preparing a pipeline announcement Tuesday that could include as many as four major decisions, people familiar with the plans say, as Enbridge Inc. and Kinder Morgan Inc. await rulings on their multi-billion dollar proposals to bring Alberta oil to global markets.
Trudeau has announced a press conference at 4:30 p.m. in Ottawa on Tuesday where he is expected to address pipeline decisions, though his office didn't specify the subject matter. He will then meet with Rachel Notley, premier of the country's main oil-producing province, Alberta. Decisions are pending on three crude pipelines -- Enbridge's Line 3 and Northern Gateway, and Kinder Morgan's Trans Mountain -- and on a previously pledged tanker ban along British Columbia's northwest coast. At least some, perhaps all, are set to be announced, the people said, speaking on condition they not be identified.
Trudeau is expected to approve Trans Mountain and Line 3 while rejecting the Northern Gateway project, according to a report Tuesday from Montreal's La Presse newspaper. It's unclear whether a tanker ban will be announced, the newspaper reported.
Trudeau is seeking to boost economic growth, cut emissions and raise environmental standards all while his country's crude production is slated to grow. The pipeline decisions will be a key test of his objectives one year into his tenure.
Keystone Revival
Canada will reveal decisions “very, very soon,” Natural Resources Minister Jim Carr told reporters Monday. In addition to the three projects, the election of Donald Trump has raised hopes that TransCanada Corp.'s Keystone XL pipeline to the Gulf Coast will be revived. “It's an objective of the Government of Canada to expand its export markets, so Keystone XL is an important proposal for Canadians, and we are reviewing others,” Carr said.
Trans Mountain, Line 3 and Northern Gateway have each been conditionally approved by Canada's National Energy Board regulator. Trudeau's predecessor approved Northern Gateway, a decision later rescinded by a court ruling. Enbridge and Kinder Morgan declined to comment ahead of any government decision.
Trudeau's cabinet met Tuesday in Ottawa, and his lawmakers have regularly said Canada needs pipelines to the ocean to sell to buyers other than the U.S. -- a goal Carr argues the Trans Mountain proposal satisfies. Trudeau is said to favor Trans Mountain in his search for a new oil pipeline, which would effectively break a pledge to redo its regulatory review. He also has pledged to reject Northern Gateway altogether. Trans Mountain and Northern Gateway both pass through British Columbia, the birthplace of Greenpeace where environmental pledges underpinned Trudeau's election campaign last year.
Trudeau faces prominent opponents of Trans Mountain, including local mayors and one of his own lawmakers. Maureen Thomas, chief of the Vancouver-area Tsleil-Waututh First Nation, visited Ottawa Monday to lobby against the project. “If the government decides to approve the pipeline without our consent, it will reopen many old wounds," she said in a statement.
Pipeline ‘Roadkill'
Observers affiliated with each of Canada's two main opposition parties say they expect Trudeau to approve Trans Mountain and reject Northern Gateway. Line 3 is the least controversial, lowest-profile project of the three.
“Northern Gateway's been roadkill for three years. That hardly provides cover” to approve Kinder Morgan's Trans Mountain instead of redoing its review, New Democrat Leader Tom Mulcair said in an interview. “I think they're in for a bit of a surprise if they think they can use the canceling of Northern Gateway as cover for approving Kinder Morgan, because Kinder Morgan was the object of a very specific promise by Mr. Trudeau himself.”
Trudeau has steadily set the table politically to approve a pipeline -- announcing more stringent review rules, a carbon price, funding for marine protection, an overhaul of the country's energy regulator and a faster phase-out of coal power to cut emissions.
Assisting B.C.
The steps by Trudeau will “assist” British Columbia if it decides to ultimately support Trans Mountain, Rich Coleman, the province's deputy premier, said last week. Canada Environment Minister Catherine McKenna, meanwhile, signaled last week emissions won't be a significant factor in any Trans Mountain decision because crude will otherwise travel by rail.
Kinder Morgan's Trans Mountain is a 1,150-kilometer (715 mile), C$6.8 billion ($5 billion) expansion of an existing pipeline from Alberta through to the Vancouver-area community of Burnaby that would roughly triple capacity to 890,000 barrels per day. Enbridge's Line 3 is a 1,659-kilometer replacement and expansion of an inland pipeline to Wisconsin that would roughly double daily capacity to 760,000 barrels, with an estimated cost of at least C$7.5 billion for the Canada and U.S. segments.
Enbridge's Northern Gateway is a C$7.9 billion, 1,178-kilometer crude pipeline that would carry an average of 525,000 barrels per day from Alberta to the northwest British Columbia coast. In September, Trudeau approved Petroliam Nasional Bhd's proposed Pacific NorthWest liquefied natural gas project in the same region.
To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net. To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Stephen Wicary, Chris Fournier
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
