May 29, 2018 / 8:40 PM / 3 months ago

Pipeline move a risk for Canada's Trudeau, but inaction worse

OTTAWA (Reuters) - Canada’s decision on Tuesday to buy a troubled oil pipeline is a big risk that could cost Prime Minister Justin Trudeau important voter support in a major province, but insiders say failure to act decisively to boost energy exports might hurt his chances to win re-election in 2019.

Workmen inspect steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project at a stockpile site in Kamloops, British Columbia, Canada May 29, 2018. REUTERS/Dennis Owen

Trudeau’s Liberal government said it will buy Kinder Morgan Canada Ltd’s (KML.TO) Trans Mountain pipeline for C$4.5 billion ($3.5 billion) in hopes of saving a project that faces major political and environmental opposition.

“I think this could end up being the biggest gamble of his mandate,” said pollster Nik Nanos, noting Trudeau came to power in late 2015 promising to do more for the environment.

“This is a very risky political move in terms of the prime minister’s personal brand and the brand of the Liberal party, but weighed against the needs of the economy, the Liberals probably see this as a necessary move.”

Liberal insiders hope the move will help dispel criticism that Trudeau dithers on big issues, ditching some campaign promises and consulting endlessly on others with little actual achievement after three years in office.

Party operatives dispute that Trudeau has frittered away his time in power but they concede the accusations of inaction are taking a toll.

The main opposition Conservative party is becoming more competitive in polls, and even took the lead in one Nanos Research survey released on Tuesday, which showed Conservatives at 36 percent public support and the Liberals at 33 percent.

“It is better in this case to take action - even if it turns out to be the wrong choice - than do nothing,” said a well-placed Liberal source, who requested anonymity because of the sensitivity of the situation.

Trans Mountain runs from the Alberta oil sands to the Pacific province of British Columbia, and a planned expansion is a centerpiece of Trudeau’s energy policy and key to helping meet carbon emission agreements.

Opposition is fierce in British Columbia, where the Liberals won an unexpectedly large number of seats in 2015, yet Trudeau says the expansion must go ahead so exporters can ship oil to global markets.

Senior Liberals play down the chances of a political massacre in the 2019 election, noting recent polls show a slim majority of people in British Columbia back the pipeline.

The pipeline’s biggest supporters are in western provinces like Alberta where Liberals traditionally do poorly.

The government has “staked so much on this that if they don’t come out with a deal of some sort, that will be highly problematic for them politically,” said Monica Gattinger, director of the Institute for Science, Society and Policy at the University of Ottawa.

The Liberals, who promise to balance the needs of the natural resources industry with the environment, blocked one proposed pipeline to the Pacific coast in 2016. The proponents behind a similar line to the Atlantic pulled out in 2017 after the national energy regulator imposed more conditions.

Additional reporting by Leah Schnurr in Ottawa; Editing by David Gregorio

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