June 19, 2019 / 6:27 PM / a month ago

Canada Finance Minister says permitting work on Trans Mountain oil pipeline underway

CALGARY, Alberta, June 19 (Reuters) - Work to obtain building permits for the Trans Mountain oil pipeline started on Wednesday, Canadian Finance Minister Bill Morneau said, a day after the federal government approved the contentious expansion project despite widespread opposition.

Once complete, the project will triple the capacity of the Trans Mountain pipeline, which carries crude from Alberta's oil sands to British Columbia's Pacific Coast.

Supporters say it is a vital conduit to help Canadian oil reach higher-priced international markets, but opponents including environmental and indigenous groups and some municipalities along the route argue the risk of a spill is too great.

Tuesday's decision was the second time Prime Minister Justin Trudeau's Liberal government has approved the project. A previous 2016 approval was overturned by Canada's Federal Court of Appeal, which ruled the government had failed to adequately consult indigenous groups.

Trudeau's government bought the pipeline last year from Kinder Morgan Canada for C$4.5 billion to help the expansion project get built.

Speaking in Calgary on Wednesday, the corporate capital of Alberta's oil industry, Morneau reiterated Trudeau's promise that building work on the pipeline would start this construction season.

"Starting today work is underway on the planned permitting that will take us into the construction phase," Morneau told reporters.

Opponents of Trans Mountain are expected to challenge the approval in court. Morneau said the government felt it had fulfilled its duty to consider environmental impacts and consult with indigenous groups.

"Our view is we have done the work we need to do to make sure this project can go forward in the right way," he said.

A small pro-oil and gas rally took place outside the hotel where Morneau gave a speech to the Calgary business community, with participants chanting "Build that pipe!" and exhorting passing vehicles to honk "if you love oil and gas".

In British Columbia, where the provincial government is among opponents of the project, a protest against Trans Mountain took place in Vancouver on Tuesday evening and another is planned in Victoria on Saturday. (Reporting by Nia Williams Editing by James Dalgleish)

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