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February 2018

Vol. 23, No.7 Week of February 18, 2018

BC, Alberta go to war

Gary Park

Petroleum News

British Columbia and Alberta are embarking on the most serious inter-provincial trade war in Canadian history as B.C. threatens to impose a cap on any new shipments of diluted bitumen by pipeline or rail from the oil sands to tanker terminals on the Pacific Coast.

The showdown between the two left-wing New Democratic Party administrations erupted when B.C. moved its opposition to Kinder Morgan’s Trans Mountain pipeline expansion up a notch when Premier John Horgan and Environment Minister George Heyman announced restrictions pending further studies by a scientific panel on the behavior of bitumen spills on land or water.

In doing so, B.C. effectively seized power over the C$7.4 billion plan to triple capacity on Trans Mountain to 890,000 barrels per day, bypassing Canada’s Constitution which gives the federal government jurisdiction over the movement of oil across provincial borders.

Prime Minister Justin Trudeau and other federal cabinet ministers quickly declared the pipeline expansion will go ahead without disclosing what actions Canada is prepared to take beyond opening discussions with the two provinces.

“It’s important to get our oil resources to markets other than the United States for the Alberta and Canadian economies to continue to grow,” he said.

Alberta Premier Rachel Notley, whose province stands to collect C$1.5 billion a year from the pipeline expansion, refused to wait for Trudeau, imposing a ban on C$70 million a year of wine sales in her province.

She also suspended talks on buying C$500 million a year of electricity from B.C. and warned she was “prepared to do whatever it takes to get this pipeline built.”

Notley appointed a special task force to map out a strategy that could include seeking court rulings to enforce the Constitution. Some have urged her to shut down pipelines delivering conventional crude and natural gas to B.C.

Horgan said he was “surprised at the response from Alberta ... saber-rattling doesn’t get you very far.”

- GARY PARK






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