Kinder Morgan wrong on costs

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Dear Editor:
Re: Facts don’t back claims, Letters to the Editor, July 16, Burnaby NOW.

Scott Stoness, vice-president of regulatory and finance for Kinder Morgan Canada, would be well served to review Volume 2 in the company’s National Energy Board application for approval to expand the Trans Mountain pipeline system. In there he will find that the company tells the Canadian regulator crude oil prices in Canada will rise if the expansion is approved. Then, he needs to listen to Ian Anderson’s presentation to investor analysts in Houston, Texas, last January before commenting on my letter.

My letter points out what Kinder Morgan says about its pipeline’s expansion leading to higher crude oil prices in Canada and how Ian Anderson, president of Kinder Morgan Canada, misled Burnaby NOW readers, when he tried to massage the message for public relations purposes.

In trying to promote the expansion project’s dubious economic benefit, Kinder Morgan has claimed vast increases in the price of crude oil for all oil produced in Western Canada. If the company is going to make wild claims about windfall profits to oil producers because of higher crude oil prices – by as much as $25 per barrel according to Mr. Anderson – then they have to take responsibility for what those higher prices mean to domestic refineries who purchase Western Canadian crude and ultimately how these higher prices are passed onto consumers and businesses.

Mr. Stoness tries to suggest that Western Canadian and U.S. refineries would absorb a price increase of as much as $25 per barrel on Western Canadian crude. This is absurd. Refineries faced with such price increases in their feedstock costs will – as in the past – pass them onto us.

What I find particularly fascinating, however, is Kinder Morgan will address this issue in an open letter through the Burnaby NOW but aggressively avoids it at the NEB hearing. As an intervenor, I asked “does Trans Mountain believe that the cost of gasoline at the pumps, and the cost of other petroleum product prices facing end users may be a public interest issue?”

The answer I received was a refusal to answer: “Trans Mountain acknowledges that the price of gasoline and other petroleum prices facing end users is of interest to the public, … however, the information request is not relevant to one or more of the issues identified in the National Energy Board’s list of issues for the Trans Mountain Expansion Project.”

Robyn Allan

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