Firing back at Kinder Morgan prez
Dear Editor:
Re: Kinder Morgan president speaks, Letters to the Editor, July 9, Burnaby NOW.
In his letter, Ian Anderson, president of Kinder Morgan Canada, agrees with the key points in my study.
The report indicated that the National Energy Board, in an unprecedented move, allowed the pipeline company to establish a $136-million fund so Kinder Morgan could push its expansion plans through the regulatory review process at no risk to the company. This I pointed out was totally unfair to the Canadian consumer and to the public interest.
However, there is one deliberately misleading statement made by Mr. Anderson.
He says that shippers get higher prices in markets outside of North America. What he fails to disclose is what Kinder Morgan told the National Energy Board – that firm service to the Westridge dock would essentially guarantee reduced supply in North America for Canadian crude oil “and this would lead to higher prices in Alberta for all Canadian producers.”
When refineries face higher feedstock prices they pass those prices onto us.
This is how they maintain their profit level for their shareholders. Gas prices, heating fuel, diesel, jet fuel – they all go up. Trans Mountain’s firm shippers PetroChina, Nexen, Astra, US Oil and Cenovus agreed. They told the board during oral cross-examination at the hearing that it wouldn’t be only Asian exports that captured higher prices.
They confirmed Trans Mountain’s assertion that all producers would win because the price on every barrel would be greater with reduced supply in North America made possible by firm waterborne access to Westridge in Burnaby.
What we have seen with gas prices thanks to Kinder Morgan is nothing compared to what’s coming if Trans Mountain’s Expansion gets approved. Trans Mountain is wholly owned by Texas-based Kinder Morgan Energy Partners. What Mr. Anderson told investor analysts at Kinder Morgan’s annual conference in Houston last January was that greater pipeline export capacity to B.C.’s west coast to serve the Chinese market is crucial so it can raise the price of oil for all producers by an average of $25 per barrel.
If he’s right, by the time that price increase makes its way to us it’s about 15 cents more a litre at the pumps.
Robyn Allan, Economist
