Measurement and Testing

  • Is China Behind Canada's Pipeline?

Is China Behind Canada's Pipeline?

Jul 02 2018 Read 830 Times

From environmental concerns to economic disquiets, there's been no shortage of controversy surrounding Kinder Morgan's Trans Canada Pipeline, which will span from the Alberta oil sands to British Columbia's Pacific coast. Now, Canada’s federal government has announced plans to purchase the pipeline from the North American energy infrastructure giant.

Bill Morneau, the country’s finance minister has confirmed that Justin Trudeau’s government will spend US$3.5 billion to acquire the pipeline and ensure construction powers ahead. Ultimately, it will allow Canada to independently ship unrefined oil to refineries in the US and Asia.

“It must be built. It will be built,” asserts Morneau, who described the Trans Canada Pipeline project as a “vital interest” for the nation's economy.

Honouring Harper-era agreements

So what pushed Canada to place the multi-billion-dollar bid? According to some analysts, the move could have been motivated by a fear of being sued by China. Looking back to 2014, the Harper government negotiated an obscure agreement called the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA). Among other promises, the bilateral investment treaty guarantees China the construction of a pipeline from Alberta to BC.

If Canada was to embargo the Trans Canada Pipeline it could face major lawsuits brought forward by Chinese corporations, including PetroChina and state-owned CNOOC, which purchased Canadian oil and gas company Nexen for US$15.1 billion back in 2013. It wouldn't be the first time China has sued a country on economic grounds, with the People's Republic recently launching a US$2 billion arbitration claim against Belgium for breaching a foreign investment protection treaty.

A nationwide backlash

While the acquisition may keep China happy, the Trudeau government will now face serious backlash from almost 25% of the Canadian population. Standing in fierce opposition to the project is the government of British Columbia, as well as environmental activists who maintain that constructing a pipeline will damage the delicate natural ecosystem, accelerate climate change and ensure Canada fails to meet its Paris climate accord commitments. Similarly, coastal towns and a host of First Nations groups fear the pipeline will and disrupt local communities. There are also fears that transporting oil out of the country will accelerate the closure of local refineries and put Canadian jobs at risk.

Belgium may have faced friction with China but that didn’t stop the country from hosting a seamless International Conference & Exhibition on Petroleum, Refining and Environmental Technologies. For more information on the event check out 'Major success for PEFTEC 2017 in Antwerp'.

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