Jason Kenney and the KXL Deal

Last week Mr Kenney threw away (yet again) his belief in the sanctity of the free market by announcing his government (ie. us) would invest $1.5 billion in TC Energy (formerly TCPL) to complete Keystone XL and provide a $6 billion loan guarantee.

Saved by the Alberta government

Mr Kenney speech was peppered with comments about Saudi “predatory dumping” and “lawfare” waged by foreign funded interests, but his most disturbing comment was that if Alberta did not intervene, KXL “would not be built” or would not be built at “any time in the foreseeable because “there are no prospective private sector bidders for the KXL project at this time.”  

This raises two questions (1) was TC Energy looking for “private sector bidders” for KXL and (2) without such “private sector bidders” was KXL doomed to fail.

The answer these questions lies in TC Energy’s filings under Canadian and American securities laws. There TC Energy takes a sanguine position, simply saying KXL “continues to advance” and TC Energy will continue to manage various legal and regulatory matters before making its final decision to start construction.

Premier Kenney buys a pipeline

Unlike Teck who made it crystal clear it would not proceed with Frontier unless it had a partner, TC Energy has never said it would not proceed with KXL unless it found a “prospective private sector bidder” which I think is Jason Kenney’s convoluted way of saying, a partner.  

So unless Mr Kenney knows something TC Energy’s executives, Board of Directors, bankers, shareholders and investors do not know, one has to wonder why he said KXL was kaput without the intervention of the Alberta government.

But let’s assume for the sake of argument that Mr Kenney was correct when he said KXL could not proceed without billions of dollars from the Alberta taxpayer; is the risk of this investment worth the benefits?  


Mr Kenney said while the risks are “obvious” this billion-dollar investment was a “solid bet” because it will deliver $30 billion in royalties and taxes over the next 20 years. However, he refused to provide the forecasts supporting his prediction and given how badly he miscalculated oil prices in Budget 2020 we will take Mr Kenney’s promise of a $30 billion upside with a grain of salt.

Mr Kenney told the House that Alberta taxpayers are protected because our $1.5 billion equity investment is “at the top of the capital stack” and this is a “preferred investment where we’ll sell the shares at a profit.”

Umm, no, this doesn’t allay our concerns.  

Firstly, while TC Energy has agreed to reacquire the Alberta government’s “preferred investment” after the project is completed and placed into service, TC Energy says there’s no agreement on the “sell back” price so how can Mr Kenney promise he’ll sell at a profit?  

Secondly, can someone nudge Mr Kenney’s Justice minister, a bankruptcy lawyer, and ask him to explain to Mr Kenney that equity investments whether they’re preferred or common, rank below debt, and creditors take priority over shareholders (that would be us).

Bottom line: not only are Alberta taxpayers bearing the risk of losing their $1.5 billion investment, they’re on the hook for $6 billion in loan guarantees. And they’re taking this risk on the strength of Mr Kenney’s fuzzy assurance they’ll reap $30 billion down the road.  


Mr Kenney listed other benefits of investing billions of taxpayer dollars in TC Energy, including:   

  • Kick-starting the oilsands. He did not explain how KXL will reverse the double whammy of rock bottom oil prices as a result of the Saudi-Russia price war and tepid demand due to the Covid crisis. Perhaps because KXL will have zero impact on either.
  • Creating 1,400 direct jobs in Alberta, 1,200 in Saskatchewan and 300 elsewhere in Canada and 5,400 indirect jobs in Alberta and 12,000 indirect jobs in Canada…oh wait, that’s not the whole story…KXL will also create 10,400 direct jobs and 42,000 indirect jobs in the United States. Listen, I have no problem with Americans going to work, but I question why Mr Kenney was satisfied with Albertans bearing all the risk while Americans reap eight times the benefit.  
  • Getting to work now. Mr Kenney and his energy minister insist Albertans are working on KXL right now (with “now” being Apr 1 or 2 depending on who’s speaking), however TC Energy’s CEO said in light of the Covid crisis “construction will advance only after every consideration for the health and safety of our people, their families and of those in the surrounding communities has been taken into account.” On Apr 3, TC Energy posted a video describing its Covid protocols which at this point appear to apply only to its construction site in Montana. We’re still waiting for a Covid protocol video relating to Alberta.  


At the same time Mr Kenney told Albertans our financial position was so dire we could no longer afford to pay our healthcare workers, teachers and other public servants properly, he was negotiating a deal which required him to borrow billions of dollars to support TC Energy’s KXL pipeline.

TC Energy posted record financial results in 2019. It says dividends will grow by 8% to 10% through 2021 and 5% to 7% thereafter. It prides itself on its ability to “access sizable amounts of competitively-priced capital” while preserving its financial flexibility to fund its capital program “in all market conditions.”

TC Energy’s securities filings do not paint a picture of a company under financial stress.

So why did Mr Kenney decide it was necessary for Alberta taxpayers to make a $1.5 billion equity investment in TC Energy and issue $6 billion in loan guarantees?

If, on the other hand, TC Energy is legitimately concerned that legal and regulatory challenges will sink the KXL pipeline why did Mr Kenney (who has no jurisdiction whatsoever over American federal and state legal/regulatory matters) make a $1.5 billion equity investment that is not repayable until after the completion of a pipeline that may never get built and further, agree to backstop $6 billion in loans.

Either way it looks like Mr Kenney made a questionable decision.

All we know for certain is Albertans will be living with the consequences of his decision for a very long time.

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62 Responses to Jason Kenney and the KXL Deal

  1. Keith McClary says:

    “TC Energy says there’s no agreement on the ‘sell back’ price”

    The government claims:
    “TC Energy will reimburse the government of Alberta 12 months after oil is flowing through the pipeline”
    Does “reimburse” mean “fully reimburse”? I don’t suppose we will get to see the fine print. Is there any mention of interest or dividends?

    Also, the loan guaranty is for USD$4.2B, so we also have an exchange rate risk.

    • Thanks for posting the link to the press release. As you point out it raises more questions than answers. Based on my experience with publicly traded corporations I have never seen a multibillion dollar corporate financing deal announced so poorly.
      Corporations are financed with debt and equity. The press release starts by saying “This investment will include $1.5 billion in equity investment in 2020 followed by a $6 billion loan guarantee in 2021.” An equity investment is either preferred or common shares, Kenney said in the House and elsewhere this is a preferred share investment. Preferred shares can be “redeemed” but they’re usually redeemed at a certain price under certain conditions. TC Equity says they haven’t set the price and Kenney won’t tell us about the conditions. So we’re in the dark. And yes preferred shares can get dividends but Kenney has given us no information on that either. .
      You’re absolutely right about the exchange rate risk. The TC Energy press release says Alberta is investing US $1.1B and providing a loan guarantee of US $4.2B. When I looked at the exchange rate yesterday it was Cdn 70 cents to US $1.00. Today it’s Cdn 71 cents to a US dollar. Lord only knows what it will be by the time all this is over.
      Frankly I think Kenney wants to gloss over the risks and have us accept his narrative that he’s a great politician who saved Alberta by saving KXL. I wonder whether KXL needed saving in the first place and if so whether the billions of dollars Kenney sunk into “saving” it could have be better spent elsewhere.

  2. Midge says:

    Wow! What never ceases to amaze me is how, after 4+ years of Kenney’s mistruths, exagerations, dog whistles, obfuscation, ripped up contracts, broken promises and outright lies, anyone of the many, many smart people in Alberta can even pretend to take any of his bovine poo seriously. This man is definitely not the coldest beer in the fridge, but certainly the most shifty and shady we’ve ever seen in Alberta politics that I know of.

    • Midge, you’ve put your finger on the bigger issue. Kenney keeps doing this stuff and Albertans keep letting him get away with it. They like his rhetoric that they’re “people of destiny” and who deserve to be rich. I’ve lived in Alberta, BC, Ontario and Pennsylvania, I’ve never seen so many people so out of touch with reality as right here, right now.

  3. Blair Backman says:

    Surprised no one has asked where the $ are coming from—to hear kenney speak, the Alberta govt had maxed out their line of credit.

    Only thing that I can see to have changed is that he nationalized the teachers pension plan that he was planning to have invest in the energy sector.

    Whether the cash was placed in “investment grade” investments seems to be moot now. Why should the taxpayers worry – Kenney has found another purse to loot!

    • Blair, good point. Kenney was asked in the press conference where the money was coming from. He said Alberta was using “normal credit instruments” to borrow the money and was not drawing on AIMCo funds (a small mercy). The economist Trevor Tombe said the fact the government could borrow the funds shows the province’s “massive borrowing capacity and strong balance sheet” and that any prior statements it made alleging we were under serious constraints (hence had to lay off staff) were “completely false”.
      Why am I not surprised?

  4. Paul "kill the black snake" says:

    this overbloated carpetbagger who has lied his way to power, is finally showing us what he is made of, thin air, pipe dreams and an overbloated ego. He has stolen our childrens future and replaced it with a fossil fuel oligarchy…or should I say, oiligarchy. We have been robbed…right in front of our eyes. Kenney will destroy everything good about Alberta to feed his arrogant ideology.

    • Paul, I agree 100%. The fact Kenney convinced Albertans to take this risk when it rightly belongs on TC Energy’s shoulders is amazing. If KXL is not completed and put into service we can kiss our $1.5 billion investment goodbye and hope the $6 billion loan guarantee isn’t called.
      It’s not as if the company was teetering. It posted record financial results in 2019, raised the dividend for the 20th consecutive year and gave its CEO a 10% raise (securities filings show his total compensation was over $12 million last year).
      Alberta would have been better off investing billions in education, healthcare, and other public services as well as supporting diversification, instead Kenney doubled down on the fossil fuel energy sector.
      PS Paul I deleted the last sentence in your comment because I’m super sensitive to the ultra-right taking a run at the blog and those who post comments on it. Just wanted to let you know.

  5. DEb Lee says:

    I’ve not known what to think of Kenney’s decision to give billions of Alberta dollars to support the Keystone pipeline but your analysis (which I trust ) confirms a feeling I’ve had since the Kenney UCP were elected last year … that they are going to take our province down in a very big way… the end of the Alberta Advantage, such as it was… with the poor and vulnerable suffering the most, but I believe all Albertans will experience a big change to our lives …. thanks for your clear analysis of the situation Susan.

    • Thanks Deb. I must admit when Kenney made this announcement I was confused by it because as I mentioned above, the press release was so uninformative. Then I looked at TC Energy’s corporate website and securities filings to see what they said about KXL. Not once did they say (like Teck) they needed a partner. Not once did they say (like Kinder Morgan on TMX) that if the legal/regulatory issues weren’t resolved immediately they were calling it quits.
      Kenney said we had to do this right away, but let’s remember he started these negotiations 6 months ago. That was before the Saudi/Russia price war and Covid-19, what happened then that made him think it was imperative to give billions of dollars to TC Energy?

  6. Reynold Reimer says:

    Kenney conveniently fails to mention the climate risk of KXL. Leading climate scientist James Hanson called it, “the fuse to the biggest carbon bomb on the planet.” ( https://insideclimatenews.org/news/20110826/james-hansen-nasa-climate-change-scientist-keystone-xl-oil-sands-pipeline-protests-mckibben-white-house )
    The day will come when expansion of fossil fuel infrastructure, at a time when we know about the effects of green house gases , will be viewed as a crime against humanity. And said fossil fuel infrastructure may well become stranded assets.
    In fact I’ve never head Kenney mention the effect that burning our tar will have on the climate. He’s living in some sort of cloud cuckoo land and thinks that he can revive our moribund industry while merrily ignoring the effects of fossils on the climate. He’s a clear and present danger to the financial well being of all Albertans and to the future humans that will have to live with climate catastrophe.

    • Paul "kill the black snake" says:

      Nicely put Mr. Reimer, just what this delusional, self-serving clown is up to, we can now plainly see. …and we can’t lay charges, like abuse of public trust, theft from the public treasury, treason?

      • Would that we could Paul. Hard to believe the majority of the voters picked this guy when they had a much better alternative in Rachel Notley. But you know, the hyperbole of “socialism” gets them every time.

      • Ken says:

        There’s an adage that “we become what we hate.” With the stoke of a pen, Jason Kenney’s UPC has leap-frogged over his hated “socialist NDP” to become the largest socialist regime of modern Alberta times.

      • You’re right Ken, and yet his supporters don’t see it that way. If that’s not the height of partisanship I don’t know what is.

    • Keith McClary says:

      Kenney has been running around saying that producing dilbit makes “half the carbon emissions of the average North American petroleum project.”
      As the CBC says, it is approximately equal to the average (even the War Room gets this right).
      What he doesn’t mention is that refining dilbit is more CO2 intensive than the average crude oil.
      On a well to gasoline basis, Alberta bitumen has TWICE the CO2 emissions.

      I don’t know whether he is ignorant, deluded or lying.

    • Reynold, that’s a very interesting comment. I listened to TC Energy’s last quarterly call with analysts (Feb 13, 2020). In the Q&A one of the analysts asked about the company’s progress on ESG which is defined as a way evaluate a corporation’s performance on Environmental, Social, and Governance issues. The CEO said TC Energy has its own internal targets, but was still trying to sort out what the market place and its shareholders want to understand.
      Given that Mark Carney (former head of the Bank of Canada and the Bank of England) is working with the UN to push ESG as a vital part of any company’s disclosure (if it’s not disclosed then investors shouldn’t invest) I’d suggest TC Energy better get a move on.
      As to where Kenney stands on this, I suspect he’s back there somewhere with all the other climate deniers in his party.

  7. J.E. Molnar says:

    Jason Kenney, Alberta’s Gaslighter-In-Chief, should have taken the time to read the political tea leaves.

    Former Vice President and Democratic presidential front-runner Joe Biden has committed that his campaign will not accept contributions from oil, gas and coal corporations or executives. His climate platform already goes well beyond President Obama’s efforts (see link below), including a promise to ban all new oil and gas permitting on federal lands and waters. Should Biden be elected president of the US in November, there’s a pretty, pretty good chance Biden will do what President Obama did — cancel the Keystone XL pipeline approved by Captain Chaos, AKA Donald Trump.

    Mr. Kenney’s obtuseness is only exceeded by his shameless attempts to continually gaslight Albertans. Just for fun, the link to Joe Biden’s aggressive Climate Mitigation Plan: https://joebiden.com/climate/

    • JE, thanks for the link. Both Russ Girling, TC Energy’s CEO and Jason Kenney have been asked whether they’re concerned about the prospect of Biden becoming president. They both ducked the question. But you’re probably right; which calls into question once again the wisdom of Jason Kenney committing $1.5B in taxpayer dollars to a pipeline that may never be built. If it’s not built we’ve lost $1.5B and whatever else we’ve committed to cover in loan guarantees.
      Kenney said this was a safe bet, feels more like Russian Roulette to me.

  8. Ken says:

    With hundreds of billions of dollars invested in the oil sands plants, isn’t it odd that these companies wouldn’t come up with the funds needed to get their product moved to the buying customers. Looks like Kenny painted himself into a corner with his, “Jobs & Pipelines” sloganeering and is plunging Alberta further in debt to fulfill his campaign promises. Is this payback time to those who financed his campaigns? He seems to have the ear of the oil companies while remaining deaf to most other Albertans.

    • Ken, great point. At the press conference, Kenney closed his remarks by saying: “We were elected with mandate: create jobs, get pipelines built and grow the economy, today’s historic investment keeps that promise.”
      I’m sure we’ll see this investment on his next quarterly report card as a “promise made, promise delivered”, which obscures the fact that investing a boatload of money into a pipeline isn’t the same as seeing the pipeline built and put into service and creating thousands of jobs as a result.
      I suppose if the pipeline is never completed he’ll blame the feds for the $1.5B hole in the budget because as we all know it’s always someone else’s fault.

  9. Jaundiced Eye says:

    Kenney did say that he was going to create jobs. We just never thought to ask him if the jobs were going to be in America. Our bad.

    • Jaundiced Eye: yes and on the topic of creating jobs, he’s put us billions of dollars into debt with the promise of 6,800 direct and indirect jobs (during construction, not forever) while at the same time axing 26,000 education jobs to save $128 million after Education Minister LaGrange promised no more cuts and despite the fact this leave children with special needs and many others high and dry.
      Kind of shows you what Kenney’s priorities are, doesn’t it.

      • Jaundiced Eye says:

        Same old, same old. The profits will be privatized and the losses will be socialized.

      • Jaundiced Eye: that’s the weird thing about the UCP ideology. When they throw around taxpayer dollars (billions of them) it’s an “investment”, when the NDP allocates taxpayer dollars to education and healthcare it’s a “handout”.

  10. CallmeHal2000 says:

    It has become abundantly clear that Jason Kenney’s Covid-19 relief plan consists of billions of $U.S. dollars ($US, not CDN) in corporate handouts, and layoffs for public education workers, while throwing responsibility for financial aid for those unemployed workers onto the federal government. Allegedly, according to Kenney, wage savings from education will be applied to health, or so he said before the $128M was dwarfed by $7.5B US. At the same time, he his man Shan has harassed doctors, and doctor remuneration has been cut, leading to withdrawal of doctor services from rural hospitals.

    Kenney’s people promised to give Alberta an enema. Maybe they should have called it the pandenema: taking Alberta’s money away from Alberta during a health crisis. Shandenema also applies: putting the screws to doctors during a pandemic, while Kenney drains the treasury on expensive pet projects that make no sense in the current financial climate. Promise made, promise kept.

    Is there actually one cent of provincial money being spent directly on hospitals and health for Covid-19 that did not come from the feds? Doubt it.

    End times are upon us in Alberta, the endenema times. The cupboards will be bare. Look in the mirror, Alberta. Not so much as a crumb for you; Kenney and friends don’t care. Is the obvious coming home to roost yet?

    • CallmeHall: one wonders what it is about Albertans that makes they cherish fossil fuel jobs over and above everything else, including the professions that take care of their health and educate their children. It’s insane.
      My husband send me a photo of old time lumberjacks posing next to what was left of a giant redwood tree. Apparently lumberjacks were men who “built a traditional culture that celebrated strength, masculinity, confrontation with danger, and resistance to modernization.” Suits these “get ‘er done” types to a tee. Incidentally when Kenney introduced Russ Girling, TC Energy’s CEO, at the press conference he turned to Girling and said “Russ, let’s get ‘er done.” The man lives in his own little deluded world.

  11. Political Ranger says:

    How is it that we get all these mental retards running the show?
    You see a few jurisdictions over to the East a Premier who would, or will never be considered anything but slow-witted, but he’s smart enough to listen to those who do know what they’re talking about and he has enough character to step up and into his leadership role. People are rightfully proud of him.

    We have none of that in Albaturda.
    Instead we have a bunch of cruel, self-serving, criminally-minded slobbering idiots. They, in total, know nothing about what they are doing! And then they lie; those job numbers have no basis in fact and I dare anyone on a ministerial staff to even point to the argument in which they were derived. They are total BS, road apples, hogwash, barnyard droppings – in other words, pure fabrication.

    Rhetorically, how did we get here?
    Not so rhetorically, for the remainder in the province who haven’t already left or are planning to, what do we do now?

    These clowns and carpetbaggers and criminals have given away a $4.5 billion tax break to petro-corps, they have decimated the regulatory system, such as it was (very weak to start with), they are in the process of dismantling the public service and the public health care system, they are stealing public pension funds and now blindly pouring $billions into an ideological fantasy that no one who has the sense god gave green apples and money to invest would touch with a 10′ pole!

    Why not invite the Hells Angels in to the Legislature or some Latin American drug lord? At least they know how to run their business.

    • Political Ranger, the question you raise is critical: how did we get here and what do we do now.?
      Some people I know are putting a lot of energy into think tanks and educating each other about the issues, this is helpful but they’re preaching to the choir. We need to (1) strengthen the NDP because they reflect our values and they’re the only party who can take on the UCP and (2) refute the garbage the UCP spews by being educated about the issues and more importantly, prepared to speak out about them.
      It’s either that or say enough is enough and bail. My husband and I haven’t reached that point yet but we’re certainly talking about leaving more than we ever did before.

  12. Brent McFadyen says:

    I wonder when Albertan’s will learn they have been been played as fools by right wingers in this province for a very long time. When are the results of ” kamikaze” candidate investigation by the RCMP going to be released? This province has little hope of ousting these people because they control our education and they are feeding money to right wing religious schools. The students are indoctrinated with the right wing ideology ever so subtly as children. They seldom stay from what is ingrained from age five.

    • Brent your point about indoctrination is well taken. Remember the panic that ensued when the NDP were elected in 2015. Calgary went berserk, my god, who would the oil barons call at the Ministry of Energy? After 44 years of an incestuous relationship with the PCs they’d forgotten the role of government wasn’t to make their every dream come true. So now we’ve come full circle. The recent appointment of Laurie Pushor as CEO of the Alberta Energy Regulation does not inspire confidence. Replacing one scandal ridden CEO with another will not restore the credibility of the AER.
      Here’s the link:https://www.cbc.ca/news/canada/edmonton/laurie-pushor-aer-ceo-saskatchewan-scandal-1.5521162

  13. CallmeHal2000 says:

    Here’s what’s coming, what 55 percent of Alberta voters wanted.

    “Even now many people fail to grasp the true meaning of the word “austerity”. Austerity is not eight years of spending cuts, as in the UK, or even the social catastrophe inflicted on Greece. It means driving the wages, social wages and living standards in the west down for decades until they meet those of the middle class in China and India on the way up.”


    • Hal: that was a very thought provoking article. I certainly agree with the author’s description of austerity, I hope he’s right when he says now is the time “to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system.” because his vision of the postcapitalist society is compelling.
      Thank you.

  14. Carlos says:

    There are articles everywhere but somehow the UCP only reads the ones they do not even have because no one is predicting the growth of the oil industry other than Idiot in Chief


  15. Carlos says:

    These articles just keep coming but somehow the UCP ignores it all. They do not even care about the ones in favour of their oil investments because there are none – but Idiot in Chief just keeps pushing for disaster


    • Carlos, the UCP may feel comfortable ignoring the Tyee, but I don’t think they can ignore the Globe and Mail which ran an editorial today that concluded “Albertans’ $7.5 billion is very much at risk.” (This is the newspaper that endorsed Harper for PM in 2015).
      The article listed the following concerns: (1) soaring construction costs (note: Kenney said TC Energy was on the hook for cost overruns, we’ll see if he’s right), (2) KXL’s future is in the hands of US regulators, (3) American legal and regulatory risks could kill it, and (4) political risks like the election of Biden could kill it.
      The Globe also points out there’s no indication Kenney weighed out other ways Alberta could invest $7.5 billion.
      I thought Kenney had lost it went he put through the $4.7 billion corporate tax cuts that didn’t create a single job, but this $7.5 billion gamble is lunacy.

  16. Dave says:

    Although I don’t have much confidence in what Mr. Kenney says, it is possible the situation for the pipeline was more dire than the company was letting on. However, a few things don’t add up.

    First, I believe the government of Alberta said its discussions with TC (they don’t want to use Canada in their name any more as that apparently causes issues with some Americans) started in September of 2019. It seems a long time to keep such a secret, not that I am surprised that Kenney would keep this from the public, but with a public company some things come out or need to be disclosed. It is surprising that unlike Trans Mountain or the Teck project, there was absolutely no public discussion of the viability of the project before the government announcement. It is like the dog that did not bark and is the first thing that leads me to question Mr. Kenney’s credibility on this.

    Second, I have to wonder about the the recent collapse in oil prices and its effect on the viability of this pipeline. If it was on shaky ground before (based on Kenney’s alleged September timeline), you have to wonder where it is now. I don’t think Mr. Kenney can have it both ways – if this project is solid, then the company should be able to proceed without government support, if it is not solid then there is some significant risk to the taxpayers. I am not sure where loan guarantees rank, but preferred shares do rank after debt and that is not a good place to be in the energy industry these days.

    Third, I would argue there is even more risk here than with Trans Mountain, which is entirely within Canada and is being funded by the Feds. At least all the issues for Trans Mountain are within our own political jurisdiction. A foreign government could shut down the US part of Keystone on a whim. The current President of the US seems quite willing to take arbitrary measures against foreign countries and companies almost on a daily basis and lest we forget, the previous Democrat Obama administration actually did shut down this project before. While Mr. Trump still seems fairly committed to it, the fate of this pipeline could hang on the outcome of the next US Presidential election and I am not sure at this point it would be very prudent to make big bets on Mr. Trump winning that.

    This all leads me to believe, Mr. Kenney, and more importantly, Albertans are taking on much more risk than he is letting on. By keeping this a secret until it was a done deal might have been a clever political ploy by Kenney, but it also took away the opportunity to have an important public discussion about something that could have huge financial consequences for all of us.

    • Dave you raise some very good points. As you said, if KXL is such a “sure bet” then why did we have to invest $7.5 Billion to ensure it would be built. It would have been built with or without our $7.5 billion. Conversely if KXL was on life support why are we risking $7.5 billion to save it. TC Energy knows more about the pipeline business than Kenney does, if TC Energy were prepared to let KXL die, then it should die.
      Our biggest risk is TC Energy will not be able to finish KXL and we lose our $1.5 billion. Depending on the terms and conditions of the loan guarantee we could still be on the hook for unpaid loans, although I have a hard time believing TC Energy would default on its loans because loan agreements usually contain cross-default clauses and a default under one agreement would trigger a default under another.
      There’s always the possibility that TC Energy wanted to cut its losses and stop KXL in Sept 2019, but their securities filings right up to Feb 2020 indicate that all of the legal/regulatory road hurdles were successfully addressed and they were on the path to continue.
      All I know is there’s something wonky about this deal.

  17. diamondwalker says:

    .. Since elected, Jason Kenney et al appear to have taken over several Pension Funds.. and are seemingly directing investment from within AIMco. In my view this is standard Harper / Kenney / Conservative ideology when gifted a majority Government.

    Your excellent post suggests there are still existing paths to identify, question & overcome what certainly is questionable ‘Public Service’ .. by elected and unelected – so called Public Servants in Alberta. I do not recall any Mainstream Media that I have seen or read, that comes even close to the factual observations in your post.

    Little if any ‘oil’ will ever flow throught the KXL Pipeline into the USA. Primarily because we really have no idea what a miniscule resource % Conventional Alberta Oil comprises. We do know with certainty that fully 96 % of ‘Canada’s Vast Oil Reserves’ are actually Bitumen.. and when blended with approx 30 % diluent it is quoted worldwide as such, delivered by pipeline as ‘dilbit’ .. a synthetic slurry. The refined & valuable diluent or condensate is seperated out (it too is quoted as well as being embedded within the dilbit daily or hourly price)

    The other investments made since the UCP was elected should also be listed, examined and made public.. certainly to Alberta pensioners. This past Christmas, did a single MainMedia outlet mention that Alberta had purchased 65 % equity & control of a BC methane pipeline named Coastal GasLink owned by TC Energy ? Its impossible to believe actually, that in the midst of all the outrage over First Nation protests, regarding that same pipeline.. neither TC Energy or the new owner.. Alberta Government were mentioned ! This was not in the interest of Albertans ? Of Canadians ? It defies belief

    I note the convenience of insulting statements from elected ‘Public Servants’ – paid and pensioned by Canadians.. who pronounce generalities such as ‘they want to shut down Canada’s Oil & Gas Industry’. Forget the ludicrous boasts such as ‘Ethical Oil’ ‘Nation Building’ or ‘World Class Environmental Regulatory Laws’ or the mysterious ‘Foreign Environmental Funding’ .. and the dog whistles of actual Foreign Owned sellouts like Post Media.. or the daily snouting of Welfare Queen Andrew Scheer

    If Albertans need funding ASAP .. as does all of Canada.. what funds remain in Alberta’s reach ? Is Jason Kenney’s ‘strategy’ to simply rob Peter to pay for his energy superpower ideology & Paula can wait for the Federal Government.. ie the rest of Canada to look after Paula and Paul ? Show us the Money ! Or where it went ! Show us the current perceived ‘value’ of Albertan’s investments made at your direction Mr Kenney ! All of them ! Show us the ‘projections’ ! As well as their value just prior to your decisions !

    In my view.. the facts or revelations will shock Albertan’s..
    And be obstructed & denied viciously.. Expect It !

  18. This are excellent observations diamondwalker. Let me pick up on the point of Kenney robbing Peter to pay for his energy superpower ideology and making Paula wait for the Feds to step in. On Thursday Kenney told Bloomberg the energy sector (and I use the term loosely because as you point out all oil is not the same) needs a $20 billion bail out package from the Feds. This appears to be over and above the bail out package he wants to clean up orphan and abandoned wells. The Alberta Liabilities Disclosure Project estimates it would cost between $40 and $70 billion to clean up the mess the energy companies left behind.
    It would make sense to me that if the feds gave the energy sector any money they’d specify that it had to go towards cleaning up the mess the sector made in their own backyards.

    • Dwayne says:

      Susan: As I recall, the cost of cleaning up oil industry related messes in Alberta is $260 billion. Senior staff at the AERB were ‘let go’, because they were too truthful in their findings. (Just like Lorne Gibson was.) Jason Kenney and the UCP have also paid off many people from the AERB, price probably because they were doing their jobs a little too well. Ottawa should not be bailing out Alberta.

      • Dwayne* says:

        *laid off*

      • Dwayne, things are going to get a lot worse for Albertans worried about the environment and climate change now that the UCP appointed Laurie Pushor to be the CEO of AER. Given his scandal ridden past in Saskatchewan, Pushor shouldn’t have made the short list let alone been the successful candidate. A friend of mine in academia asked the government for a copy of Pushor’s resume when this appointment was announced in March. He was told that it would become available when Pushor took over the reins in April. Makes me think they know they’ve got a problem and are trying to hide it and now with Covid-19 they’ll be able to do just that.

  19. Dwayne says:

    Susan: Thanks for another great blog. I clearly
    remember how the Alberta PCs were, ever since Don Getty was premier of Alberta. The Alberta PCs had very little regard for taxpayer’s dollars. So much money was wasted on very costly debacles. Gainer’s, Novatel, pulp and paper mills, metal smelting plants, Swan Hills, the West Edmonton Mall bailout scheme, the mad cow bailout failure, way over $30 billion on electricity deregulation, the carbon capture and storage experiment, the fancy penthouse suites, costly flights, with so many empty seats, the mega billion dollar lawsuit ploy against the tobacco companies, leaving Albertans with gargantuan bill of $260 billion to remediate messes created by the oil companies in Alberta, and so on. I remember Ralph Klein lying and saying he never did any scandals. He did some of the ones I brought up, and more than that. Ralph Klein was complaining about the federal Liberals and their puny ‘Adscam’, which was $100 – $250 million, yet he did far worse! One other very costly debacle the Alberta PCs had done, was squander $35 billion on a bitumen upgrader. It is not less than that, as other people and sources claimed. It is $35 billion. It had a cost in building it, which went up, and the Alberta PCs also fed it with bitumen. It is just a sinkhole of debt, as oil prices are far too low. The Alberta PCs made a big mistake in thinking oil prices would rise, and that’s where this bitumen upgrader failed. (Peter Lougheed did have prior experience in the oil industry, and knew oil is a volatile commodity, and that oil booms can easily go bust.) No Alberta PC government, after the one led by Peter Lougheed would accept the volatile nature of the oil industry. Another interesting, (and hardly surprising) fact, is that in the 1990s, Alberta PC premier, Ralph Klein gave away what was once our oil, and pretty much the majority of the profits to oil companies from other parts of the world. This adds to the foolish move, in 1986, when the Alberta PCs permanently altered our oil royalty rate structure. What little is left in our Heritage Savings Trust Fund, (the Alberta PCs never topped it up, since 1986, and just acted like it was their own bank account), if it were multiplied by slightly over 10, that is what we lost in revenue from the reduced oil royalty rates. What have the UCP done? For a start, Jason Kenney and the UCP have had a foolish idea that oil prices would rise. Oil prices are not rising. Triple digit oil prices have ended in 2014. Next, the UCP has given close to $5 billion in corporate tax cuts. This just lost Alberta that money. Not one new employee was hired. Then, the UCP have blown $120 million on a useless ‘War Room’, along with wasting close to $200,000 to operate this ‘War Room’. The UCP have blown money on plane flights to different locations, and there was nothing of benefit from these plane flights. India and London, England, are two that come to mind, but all the UCPs plane flights had nothing good come from them. Also, the UCP MLAs were in costly hotels. The UCP has also thrown away our money on panels and committees that are biased, and have a fixed outcome. The UCP has also blown money on lawsuits which they know they will never win. The kicker is that Jason Kenney has been looking to Ottawa for financial help. He and the UCP have then had to give $3 billion in ‘relief’ money to help Alberta through these tough times. Yet another very stupid mistake by Jason Kenney and the UCP, has been spending over $7 billion on a pipeline. Jason Kenney mistakenly thinks this will bring jobs and prosperity to Alberta. He also naievely thinks it’s our oil. It’s not our oil anymore, as I said earlier. What jobs? The Alberta end of this pipeline is shorter than summer in the Canadian Arctic. We know from Jason Kenney’s tenure in the CPC, how he expand the Temporary Foreign Worker (TFW) program. That is likely who will be working on this pipeline. The price of WCS, let alone regular oil prices, are very low. Another pipeline is not going to make a return to higher oil prices and oil booms. If someone can get a fast food meal combo deal, for more than what WCS is currently worth, there is a problem. The cost of this pipeline will rise, and Albertans will be footing the bill. As usual, Jason Kenney will try and blame others for it. It is also hypocritical for Albertans to get upset at Justin Trudeau for paying $4.5 billion for a pipeline, (they forget Jason Kenney was supporting that), and now they cheer Jason Kenney for paying for TMX. In addition, look at all the layoffs the UCP has done. The needy, our elderly, our medical professionals, our students and our teachers are suffering, yet Jason Kenney and the UCP have more of our money to throw down the drain. (There are still people who try to defend Tyler Shandrtheo, which is also bad.) The Alberta PCs, starting with Don Getty, also had little regard for the needy, the elderly, our medical professionals, our students and our teachers, while throwing our money away on fruitless endeavours. When will Albertans ever learn?

    • Dwayne says:


      • Thanks Dwayne for this amazing overview of money going down the drain. On the topic of Shandro, Kenney told the Legislature that Shandro was the best Health Minister the province had ever had. Not “one” of the best, but “the” best. This is ridiculous. I wasn’t keen on some of the PC’s health ministers but every last one of them towers over Shandro. I can’t recall a single PC health minister going to a private citizen’s house to scream at them in front of his kids or calling them up on their private cell numbers, let alone imposing draconian budget cuts and refusing to “pause” them in the face of a pandemic. Kenney says if the doctors leave Alberta, they’ll be replaced…by who?

  20. GoinFawr says:

    More shock doctrine decrees on the way: environmental reporting is, what, optional in Alberta (and the US for that matter) now?
    Naomi Klein would be so nonplussed.

    • Dwayne says:

      GoinFawr: Not happening now in Alberta, and likely won’t be happening ever.

    • GoinFawr, shock doctrine is a good way to describe it. I agree we’ll see more draconian legislation come down the pipe before the pandemic is over and once these horrible laws are in place, they won’t be repealed. This is a scary time to be an Albertan.

  21. Carlos says:

    Jason Kenney is a master of deceit and now is blaming again the Federal Government for being too late with the reaction to covid-19 – this is the first step to blame Justin Trudeau for our unemployment. The pandemic saved him from the embarrassment of his own created numbers.

    Everything everyone else does is a mistake. Everything he does is correct and for the benefit of the people of Alberta – what a crook this man is and he is so full of himself that does not even realize how idiot he is.

    This all sounds like an horror movie where lies are the cause of the tension. What a nightmare

    • Carlos, Kenney’s bafflegab continues to work with his supporters. They’re devoted to him because he’s anti-abortion, anti-gay and (in their eyes) “a good Catholic.” I challenge anyone to show me an example of Kenney acting with goodness and spirituality when he’s cutting funding for public education, public healthcare and other public services.
      What’s even worse is he lies to us nonstop when he’s doing it.
      Economists Trevor Tombe and Blake Shaffer wrote a piece in the Globe that said Kenney justified laying off 25,000 education workers because he had to “divert” the $123 million to fight Covid-19, but this was “not true” (in other words, a lie). Kenney said the government’s ability to borrow was limited in the economic downturn, but 2 days later it gave TC Energy a $7.5 BILLION aid package. Tombe said this “demonstrates Alberta’s strong balance sheet and incredible fiscal capacity.”
      Bottom line, Kenney lies and idiotic Albertans believe him.
      As my daughter always says, “nothing can fix stupid”.
      Here’s the link: https://www.theglobeandmail.com/opinion/article-albertas-government-is-using-coronavirus-as-a-shield-for-laying-off/

  22. Dianne Bersea says:

    Thank you Susan! I love your clear-eyed and easy to read assessment of the Kenney boondoggle. He is so influenced by the American motto, “Life, LIBERTY and the pursuit of Happiness,” that liberty, ie. his liberty to do as he damn well pleases, supersedes any democratic and rational practice. Excellent and discussion enhancing comments too.

  23. CallmeHal2000 says:

    I keep waiting for Kenney’s UCP flock of vulture capitalists to swoop down when the pandemic has waned. This is what Tyler Shandro is talking about when he claims that he has doctors in the wings, waiting to replace any who leave. He has vulture capitalists waiting to pick the bones of our public hospitals and health system. All part of Kenney’s big picture plan. They’ll take everything, universities and colleges, too.

  24. Janna says:

    It’s not about Albertans allowing Kenney to do anything. He’s acting like a third world dictator. He’s doing absolutely what he wants, when he wants, for the reasons he wants. I wonder if he’s getting big kickbacks in an account in the Caymans or Switzerland. He’s not doing anything for the benefit of Alberta, or Canada.

    But then, he never did.

    • Carlos says:

      I agree with you 100% with the kickbacks. That is what Jason Kenney is about and always has been – himself. We gave him a chance to increase his fortune.

  25. Mike Priaro says:

    Assuming each of the three current pipeline projects stick to current schedules, Enbridge’s Line 3 will add 390,000 bbl/d of new takeaway capacity from Western Canada to the U.S. Midwest in early 2021, the Trans Mountain expansion (TMX) will transport 590,000 bbl/d to Canada’s West Coast in late 2022, and Keystone XL will add 830,000 bbl/d to the Cushing OK hub sometime in 2023. That’s about 1.8 million bbl/d of new takeaway capacity, or perhaps a few hundred thousand barrels a day less after including crude now being transported out of Western Canada by rail.

    The Trans Mountain expansion is owned by Canadian taxpayers who have incurred a $23-billion-plus liability to buy the existing line ($4.5 billion), build the expansion ($12.6 billion) and to replace the existing 67-year-old pipeline ($6-billion-plus). The Trans Mountain expansion cannot competitively access new, diverse, undiscounted, international markets in any significant volumes as its Aframax tankers, only partially-loaded as a result of shallow waters under Vancouver’s Second Narrows bridges, will not be competitive with Very Large Crude Carriers (VLCCs) — the workhorses of the international oil trade. TMX will primarily serve U.S. Puget Sound refineries, California refineries, and U.S. Gulf Coast refineries via Panama.

    Furthermore, the very high capital cost of TMX will result in pipeline tariffs easily double or triple current line tariffs.

    Keystone XL is currently effectively owned by Alberta taxpayers who have made a $1.5 billion direct investment and given $6 billion in loan guarantees to get the line built. Keystone XL will serve U.S. Gulf Coast refineries with no plan, approvals, or ports in-place to load VLCCs for direct, large-scale export of Canadian heavy crude from U.S. Gulf Coast ports.

    It is anyone’s guess whether the U.S. would approve direct, large-scale export of Canadian heavy crude from U.S. Gulf Coast ports or to build the pipelines to facilitate such exports.

    The powerful U.S. oil industry is likely to object while environmentalists are sure to object. A Democratic administration may very well be in opposition to Keystone XL, again, or even cancel it in mid-construction, while a Republican administration may very well ask for something significant in return, invoke restrictive oil export clauses in NAFTA or the USMCA, threaten retaliative economic measures, or, rightly or wrongly, invoke North American energy security.

    This makes Alberta’s $7.5 billion liability in Keystone XL a very risky investment for Alberta taxpayers.

    Enbridge’s Line 3 expansion will primarily serve U.S. Midwest refineries and is the only export pipeline being built without political interference.

    Keystone XL, TMX and Line 3 are what happen when incompetent, self-serving politicians with no national vision get, or permit, pipelines to be built for political expediency and not for the benefit of Canadians — especially Albertans, the resource owners.

    Keystone XL, TMX and Line 3 are what happen when incompetent, self-serving politicians with no business sense whatsoever get, or permit, pipelines to be built for political expediency to the same, highly-discounted, limited market where about 96% of Canada’s crude exports already go.

    Keystone XL, TMX and Line 3 are what happens when incompetent, self-serving politicians with no national vision stand in the way of efficient, high-capacity, multi-pipeline, multi-energy corridors (Energy East and Eagle Spirit) to the safest ports by far on Canada’s east and west coasts — to the detriment of all Canadians.

  26. GoinFawr says:

    Interesting comment Mike, I agree: these are terrible investments… any thoughts on what effects more pipeline capacity will have while Western Canadian Select is trading at a ~20 USD/bbl discount to West Texas Intermediate, which is selling for roughly 18 USD/bbl? I have heard arguments that Alberta producers would get Brent prices if they could get their product to the ships, but even then, at these prices there is no money to be made anymore.

    Re: “…especially Albertans, the resource owners. ”

    Mike, as I have taken pains to point out to you before: Albertans don’t own any of the resource you are talking about, the entire value of that resource has long since been split up between a handful of internationally owned/and operated businesses with no more ‘allegiance’ to Alberta than Walmart.

    Please stop conflating public ownership with private.

    • diamondwalker says:

      .. there are several important misconceptions embedded here.. and in Mike Priaro’s related comment. Both are excellent comprehensive comments in my view.. & enhance the conversation / exchange of information.. BUT ..

      No mention of the BC Coastal GasLink Pipeline being effectively under the control of The UCP of Alberta or the ‘mechanics’ of the purchase. (note the relationship of this foreign driven enterprise.. and also proximity to the Alberta border with BC) No validation re Energy East as a viable potential.. perhaps Mike was referring to the existing ‘Right of Way’ corridor. A comment was made by GoinFawr re peoples’ perceptions that Diluted Bitumen could enter a pipeline in Alberta and emerge on arrival at ‘tidewater’ at Brent prices. Miraculous ! An ‘ethical blessed transformation.. loaves and fishes worthy ! Also.. Mike’s comment re VLCC .. The issue of Second Narrows water depth & tidal variation is reality. But on the US Gulf Coast, ports are opening that can discharge & load VLCC supertankers simultaneously. We do not know what may play out re higher quality Venezuelan dilbit.. but the idea that Canadian dilbit such as WCS Western Canadian Select is in great demand worldwide.. or in Asia seems completely undefendable & for good reason

      Now we hear Canadian taxpayers will ‘pay for jobs’ for Albertans.. and British Columbians.. to remediate ABANDONED orphan oil and gas wells. WHY ? .. is a great question ! Again, the facts are clear and accessible as to how such a disgrace occurred despite ‘World Class Regulatory Laws’ to never let such a travesty take place. The Tar Sands Remediation is sheer pipe dream of course. Canada cannot even remediate Grassy Narrows in Ontario or Boat Harbour in Nova Scotia.. keep in mind too that Justin Trudeau et al and Jason Kenney et al were ‘in negotiations’ prior to Covid-19 regarding upwardly ‘enhanced venting’ of tar sands tailing ponds into the Mackenzie Watershed.. think on that as ‘remediation’ hoho.. Its just ‘dumping’.. ‘Predatory Pollution Dumping’ actually. Start attacking the newspeak of Governments and their annointed Agencies folks. Think in terms of what ‘interaction with the authorities’ actually means. It means someone was killed by the police.. so there’s an example.

      In summary.. its indeed pointless to try and catelogue Donald Trump’s distortions.. just as it became impossible to list Stephen Harper’s deceits and distortions. At the same time.. simplistic accusations or summaries cannot capture the machinations, ideological failure of a glib idealogue such as Jason Kenney effectively. Only fools could believe Jason Kenney was not negotiating with John Horgan & Justin Trudeau plus TC Energy and the foreign controlled consortium LNG Canada or Kitimat LNG.. well in advance of Alberta’s last Provincial Election.

      Just look at the minor league grooming and gaming of Jason Kenney and his War Room. His Albertan taxpayers accept that Freedom of Information access re how their tax dollars are spent funding it.. or what its doing, or has done.. DO NOT APPLY..

      You are Jason Kenney’s employer for gawd’s sake.. !! Are you kidding me ? Do you really think AIMco is independant of Jason Kenney ? Are you going to let your hire.. Jason Kenney et al, elected and unelected .. who you pay.. as Public Servants ‘manage’ taxpayer $$ from the rest of Canada ?? Oh right.. ‘World Class’ Alberta Advantage..

      Finally.. Are you going to let foreign controlled Mainstream Media like Post Media poison your Koolaid .. tell me again why you let Jason Kenney spew his nonsence re ‘cutting cheques’ for the rest of Canada.. via Equalization Payments.. did he or did he not work with Stephen Harper, Ray Novak & Jim Flaherty on the last & current Equalization structuring ?

    • diamondwalker says:

      a final salvo..

      True or False ? Agreed or disagreed ?

      Alberta has tremendous natural gas resources
      Alberta has very little ‘conventional oil’ remaining
      Canada’s ‘vast oil reserves’ are actually 96% buried Alberta Bitumen

      Alberta’s current Government claims its Oil and Gas Industry ‘drives’ Canada’s Economy. The ‘provenance’ of every Oil or Gas well in Alberta and any related Ownership Chain & Sale is Public Record.

      Canadian taxpayers should know exactly how many Abandoned Albertan & BC wells are to be identified, prioritized, remediated & inspected & by whom. Some sort of ‘Positive Equity’ – shares, cash, property, infrastructure etc should be determined and secured prior to any actual expenditure of Canadians tax dollars on any well or group of wells with same provenance.

      If there is evidence of Fraud, Fiduciary Failure, Loophole ‘shedding’ useage re the Downward Ownership Chain of Abandoned & Orphaned wells, criminal charges shall apply. Same re ‘Producing Wells’ that are only pumping to evade remediation.

      Comprehensive advance methane testing & public listing of current & previous ownership must be Public Information. Prior to any expenditure or fund transfer – Federal to Provincial, a rational estimation of how many wells in total exist.. as well as the estimated cost per well remediated and the number of people employed & pay rate

      Does any of this seem ‘unreasonable’ ?

      • Carlos says:

        None of this is unreasonable. I also agree with your previous comment.
        The issue is to me why all of this is happening and why are we allowing it to continue happening? Jason Kenney is nothing but a goon playing 4 million puppets and if anyone thinks this will stop you better get some anti-depressant ahead of time.

      • diamondwalker says:

        .. Well Carlos.. and Susan..
        Imagine Kenney et al ‘only’ won a minority Government.. and the NDP and a couple of others.. Indy candidates perhaps.. from coherent ridings could defeat or at least, fairly contest some of Jason Kenney’s machinations ? Sadly.. that is not real.. and Alberta is getting the Harper Firewall Letter Redux Fandangle.. Just look at the astonishing parallels between Harper’s ‘Hostile Brand Takeover’ – via the Peter McKay Sellout.. and the current Kenney – you see pee – Alberta Advantage Red Rose Merger.. another classic Brand Makeover Takeover.. Both were/are fakes, built upon the bedrock Brand Value of the word ‘Conservative’ to an aging Western electorate

        So perhaps the mechanical Constitutional Question of The Day is.. how does a Province reign in or curb a runaway majority government.. which is already evident in Alberta.. and obviously is identical to the final Harper ‘Mandate’.. when Harper ran wild with daily deceits, Omnibus Bills, annual retreats for CEO’s and Jim Flaherty to get on same page for new legislation.. like elimination of Canada’s Inland Waters Protection, or muzzling Science and Biology & whatever the F-35 idiocy was supposed to be.. whatever the Energy Superpower wet dream was..

        Its right back to how does a population fire Public Service Failures in midstream.. and kneecap sold out Mainstream Media like Post Media.. or secretive Political Party War Rooms ?

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