Report claims Kinder Morgan charged fee to build Trans Mountain fund

A report by Robyn Allan, an independent economist who has been critical of large energy projects in B.C., was released on stating that, in an unprecedented ruling in 2011, the NEB agreed to let Kinder Morgan start charging a ‘firm service fee’ of CAN$ 1.45 for each barrel of oil shipped from its West Coast facility.

That fee was intended to raise funds from five major shippers to pay for pre-development costs on the Trans Mountain expansion project.

In a brief statement, Kinder Morgan defended the fee, saying it is working within the guidelines of the NEB and is faced with significant costs in preparing its application.

“Development of a project such as the Trans Mountain expansion entails significant study and environmental and engineering work such that Kinder Morgan and its customers are collectively sharing the development cost risk for the project,” said company spokesman Andrew Galarnyk. “The commercial terms for the project were previously approved by the National Energy Board.”

Allan said she was researching Kinder Morgan’s financial capabilities when she came across the NEB ruling granting the company permission to pre-fund its expansion application through a fee.

“The normal course of business when companies want to undertake major capital investments is their shareholders take the risk,” she said. “[But] it’s really Canadians who are bearing the costs of this application.”

Edited from various sources by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/30062014/report_kinder_morgan_charged_fee_to_build_trans_mountain/