Trans Mountain Pipeline May Bring Sunshine to Sector
Canada’s oil sector has seen rough times leading into to the latest financial reporting. However, the Trans Mountain Pipeline is showing signs of growth. Further, the oil company is experiencing a lot of opposition to its oil pipeline ambitions. The government of Canada bought the Trans Mountain pipeline system in August. Since then, the oil pipeline is under the management of Trans Mountain Corporation, a subsidiary the government wholly owns. The government acquired the company from Kinder Morgan Energy Partners. However, the project was controversial and had a lot of public backlash.
Critical Report Published
A recent report by the Institute for Energy Economics & Financial Analysis indicates the project could be a loss maker. Particularly, the report notes that the project could lead to a 36% budget deficit for the government of Canada. As the report notes, the deficits could arise from cost overruns and lack of due diligence before acquisition. At the same time, the seller of the project stands to make a profit of 637%.
As a result, various voices within Canada are calling for the release of all the documents pertaining to the transaction. Specifically, a statement from Stand.earth is calling for a review of the acquisition since it seems unjustifiable.
The reads in part:
“The Canadian federal government acted hastily and irresponsibly to buy this ill-fated pipeline. The purchase price was unjustifiably high and now the government will likely be pushed to sell at a significant loss — making this a terrible financial deal for Canadians.”
Further, there is more opposition from the First Nations as they claim they were not consulted by the government. even though the company plans to build a pipeline through their territories.
According to the Chairman of Suquamish Tribe, the project could lead to higher risks of a spill. Further, he observes that “an oil-tanker disaster could unleash toxic pollution into a sensitive marine environment that would be catastrophic.”
As a result, the First Nations are threatening a lawsuit if the project goes ahead. However, the government is not backing down. In a recent address, Finance Minister Bill Morneau said the pipeline will help to get resources to international markets to help the oil sector.
Interestingly, this is just one instance of controversy involving government projects that do not have popular support. For governments like Venezuela, the pain is high. Particularly, the government of Venezuela is pushing through a cryptocurrency project that should resuscitate the economy. According to the CryptoCoin reporter, many Venezuelans would rather use other cryptocurrencies than touch the Petro. The Petro is a government pet cryptocurrency with a one-to-one parity with the price of oil. However, people fear the crypto could collapse just like the national currency.
“The Petro is barely active in trades over cryptocurrency exchanges. In fact, analysts say that this may be the reason Dash is popular. Maybe common Venezuelans thought the government’s coin would collapse the way the bolivar is going,” the CryptoCoin reporter reads.