Trans Mountain mum on identity of insurers
By Bloomberg NewsNews
Trans Mountain Pipeline LP is petitioning to keep the insurers of its controversial Canadian oil sands pipeline confidential as environmental groups urge insurance companies to drop their coverage.
The pipeline company normally discloses the insurance companies in a so-called Financial Resource Plan that’s filed with the regulator each April. But Trans Mountain said in a Feb. 22 letter that insurers are facing pressure to stop covering the pipeline, raising costs for both Trans Mountain and its customers. Members of the public can file comments on the request until March 22.
“In 2020, Trans Mountain experienced a significant reduction in available insurance capacity,” the company said in its petition. “It sought and secured partial replacement policies to compensate for this reduction, but did so at a significantly higher cost.”
Trans Mountain has faced stiff opposition from environmentalists and some indigenous groups over a planned expansion that would bring more oil from Alberta to Asian markets. Construction of that project, which was proposed more than a decade ago, began last year after Canada’s federal government stepped in to buy the company in 2018 for $4.5 billion from previous owner Kinder Morgan Inc., which was threatening to scrap the project due to the fierce pushback.
Last year, Trans Mountain listed insurers including Zurich Insurance Company Ltd., Energy Insurance Mutual Ltd. and Liberty Mutual Insurance Co., among others.
The Canada Energy Regulator is only seeking comments related to Trans Mountain’s request concerning its operating pipeline, not the expansion project, which isn’t covered by the same disclosure rules as it isn’t scheduled to start before late 2022.
“There is evidence that certain parties have used public filings on the CER’s database to identify insurers in order to pressure them to drop their policy for the pipeline,” the company said in its letter.
A Trans Mountain spokesperson said in an email that the company filed the petition “to ensure that we have the ability to maintain reasonably priced insurance. We have all the required and necessary insurance in place for our existing operations, and for construction of the expansion project for the year ahead.”
Alberta’s land-locked oil sands producers have struggled for years with a shortage of export pipelines, which reduces the value of crude produced. But efforts to build conduits have encountered opposition from environmentalists who argue that they threaten land and waterways and worsen climate change. Such concerns helped prompt U.S. President Joe Biden, in his first day in office last January, to cancel a key permit for the Keystone XL pipeline, Canada’s largest oil export pipeline project.
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