Canada approves new pipelines to boost exports, greens ready to fight

By David Ljunggren and Leah Schnurr

OTTAWA (Reuters) - Canada on Tuesday approved Kinder Morgan Inc's hotly contested plan to twin a pipeline from the Alberta oil sands to the Pacific coast, setting up a battle with environmentalists who helped elect Prime Minister Justin Trudeau.

The government, under pressure from both green groups and the energy industry, said allowing Kinder Morgan to build a second pipeline next to its existing Trans Mountain line will help ensure oil exports reach Asia and reduce reliance on the U.S. market.

"Our duty is to permit infrastructure so Canada's resources get to market in a more environmentally responsible way, creating jobs and a thriving economy," Trudeau told a news conference, adding he was "under no illusions" that the Kinder Morgan decision would be bitterly disputed.

The government blocked Enbridge Inc's Northern Gateway pipeline from Alberta to the Pacific Coast, as expected. Trudeau had long opposed the project, which would run through the Great Bear Rainforest.

Enbridge, however, will be allowed to replace the Canadian segments of its ageing Line 3 from Alberta to Wisconsin. The proposed upgrade had been less controversial than Northern Gateway project. Enbridge said it expected the pipeline to enter service in 2019, pending U.S. regulatory approval.

Canada's energy sector, hit hard by a two-year slump in oil prices, wants more pipelines to help ease bottlenecks in moving crude out of Alberta. Canada, home to the world's third-largest crude reserves, wants to diversify away from its reliance on the United States and into Asian markets.

Kinder Morgan's C$6.8 billion ($5.06 billion) project would nearly triple capacity on the artery to 890,000 barrels a day.

""We are getting a chance to break our landlock. We're getting a chance to sell to China and other new markets at better prices," Alberta Premier Rachel Notley said in a statement.

Environmental groups, who say the risk of a spill is too great, were quick to promise resistance to the Trans Mountain project.

"You will see the movement continue to escalate in the streets as the number of protests and actions continue to grow, in the courts, and at the ballot box here in (British Columbia) and beyond," said Sven Biggs of climate group Stand.Earth.

Trudeau, keen to show environmentalists he is not selling out to the energy industry, also said the government would ban tanker traffic along the northern coast of British Columbia.

Earlier this month he said Ottawa would toughen its response to oil spills at sea, which some saw as a signal Trans Mountain would be approved.

The Liberals have taken other measures recently to shore up their green credentials, including speeding up plans to virtually eliminate coal-fired electricity, promising to bring in a minimum price on carbon emissions by 2018 and vowing to revamp the national energy regulator.

Canada's former Conservative government had approved Northern Gateway in 2014 but a federal court overturned the approval last June.

(Editing by Chris Reese and Meredith Mazzilli)