Providing coverage of Alaska and northern Canada's oil and gas industry
March 2019

Vol. 24, No.13 Week of March 31, 2019

Pipeline fight goes to court: Canada calls BC proposal unconstitutional

Gary Park

for Petroleum News

A softening or just another stalling tactic - that is the prime question swirling around a week-long constitutional hearing before the British Columbia Court of Appeal into a provincial government attempt to determine whether it has the jurisdiction to regulate the transport of oil across its land and restrict bitumen shipments from Alberta.

The panel of five judges has reserved its decision which could have a bearing on whether expansion of the Trans Mountain pipeline from the Alberta oil sands to the Pacific Coast can proceed.

Jan Brongers, a federal government lawyer, told the court that British Columbia’s planned amendments to its Environmental Management Act are clearly intended to impede additional oil shipments destined for Asian markets because they target heavy-oil shippers that want to increase capacity on Trans Mountain to 890,000 barrels per day from 300,000 bpd.

He insisted the legislative changes are selective, narrow and targeted, aiming to regulate interprovincial oil projects that fall under federal jurisdiction. “This legislation appears to be a Trojan horse,” Brongers said. “It is one that is designed to appear as constitutionally acceptable, local environmental protection measures.

“But in substance it`s an unconstitutional initiative that’s only logical reason for being is to limit federally-regulated pipelines and railways from moving additional heavy oil.”

He said the Canadian government still does not know “why the volume of diluted bitumen that’s in the existing Trans Mountain pipeline is somehow deserving of an automatic exemption from the regime, but the new volumes that would be carried by the expanded Trans Mountain pipeline are not.”

Province argues it has authority

British Columbia Premier John Horgan and other B.C. government officials have stated many times, both before and after taking power in 2017, that the province does have the authority to apply conditions and impose regulations to protect its coast.

Brongers noted that those officials, while in opposition, insisted they would look for legal tools to block the expansion.

He quoted Horgan as telling a reporter that the proposed amendments were designed to ensure that increased heavy oil shipments through the province “don’t happen in the future.”

Joseph Arvay, a lawyer for the province, said the goal is not to block Trans Mountain and the court should not presume the law would be used inappropriately in the future.

“There’s no evidence to support that theory,” he said.

Arvay told the judges that the federal government is essentially saying provinces have no power to bring in laws that reduce the risk of projects that cross provincial borders.

“They are saying just one thing - that even if the pipelines or the railways they own or operate create a risk of catastrophic environmental harm because of the substance they carry, the province is nevertheless powerless to enact laws to prevent that risk from materializing,” he said.

Arvay was adamant that British Columbia’s objective has never been to prevent the construction or operation of Trans Mountain.

He said B.C. knows it can’t stop the pipeline expansion, but it should be able to enact environmental laws to mitigate harm.


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