Clever Folks at Kinder-Morgan

There is a part of me - perhaps an embarrassingly large part of me, that admires the political skill of Kinder-Morgan. Not that I agree with them but one has to admit they have placed themselves in a position where everyone else may lose and they are almost guaranteed to come out a winner.

Kinder-Morgan, in an ultimatum published yesterday,  have given the Federal government two month to resolve the provincial conflicts and all other jurisdictional issues over the proposed pipeline. If such a resolution is not possible, Kinder-Morgan state that they are prepared to withdraw from the project.

The Federal government, no matter what it does, will come out of the whole process looking at best as being incompetent and at worst as the wrong party to be running the country. If they force the pipeline through they run the risk of losing most of their seats in southern British Columbia; if they stop championing the expanded pipeline they lose any chance of any having Liberal seats in Alberta for the foreseeable future. Not only that, but if Alberta feels unsupported the province may withdraw from their carbon tax agreement with the Federal government, a cornerstone of the Liberal's environmental platform.

If the minority B.C. government do not fight the pipeline expansion with every tooth and nail that they have at their disposal they will lose the support of the B.C. Green party and thereby risk being voted out from government within a year of two of being elected. They therefore, must be prepared to deal with rising gas prices and the resultant ire from citizens who are less enthusiastic about resisting the pipeline. Of course if the pipeline does get built, people will say they did not fight hard enough and they will lose the next election. If the pipeline does not get built there will be enough people arguing that the NDP lost too many jobs because of the cancellation.

The Alberta government has clearly staked its position in the debate. They need the pipeline and will do anything they can to insure that the project is completed, including investing public funds in the pipeline. For the NDP party in Alberta, having the pipeline built is their only hope of being re-elected. The new conservative party in Alberta is champing at the bit, ready to be oil's best friend, to promise that they will "beat" the Federal government and scrape any of the environmental protections that the present government has created (e.g. carbon tax). Everyone in Alberta knows that it was not that long ago that another Alberta premier cut off the flow of oil to the eastern parts of Canada and forced the Canadian Government to back down.

Kinder-Morgan wins no matter what happens. If the Federal Liberals prevail to somehow manage both provinces and the Supreme Court (who surely at some point will be asked to rule on the constitutionality of some point or another) to allow the pipeline to be built - Kinder-Morgan will make billions of dollars over the life of the pipeline. If the pipeline is not expanded, Kinder-Morgan will be allowed to sue the Canadian Government for billions of dollars under a NAFTA agreement, not only for money already spent, but for money that they could have earned.

As I said, one can admire the political skills of the folks at Kinder-Morgan. They are guaranteed a financial win no matter what the outcome is, everyone else loses. The next time someone says that large business are at a disadvantage in our current political environment - perhaps they should think again.