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Make up and move on: escalating pipeline dispute 'uncommon' says expert

Last Updated May 17, 2018 at 2:52 pm PDT

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Summary

Expert weighs in as both NDP government's in BC and Alberta fight over Kinder Morgan

Political scientist suggests BC and Alberta 'move on' as inter-provincial Kinder Morgan fight continues

VANCOUVER (NEWS 1130) – The pipeline feud between British Columbia and Alberta is escalating, as Premier John Horgan is threatening Rachel Notley with legal action should she enforce Bill 12.

Political Scientist David Moscrop with Simon Fraser University says it’s not unusual for provinces to “fight,” but admits this particular case is uncommon.

“This is a bridge beyond what we’re used to, and it’s probably going to sour interprovincial relationships between the government of British Columbia and the government of Alberta for some time,” he tells NEWS 1130. “And keep in mind this is as good as it’s going to get. This is with two NDP governments. Imagine if you have one NDP government and one UCP government for instance.”


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If the legislation gets Royal Assent, Bill 12 would effectively give Alberta power to cut its oil supply to BC. It’s designed, Moscrop explains, in such a way that Notley could use it for “precision strikes.”

“They could ban very specific shipments without having to ban everything, and they could do it case by case, and they could ban a little bit as an opening salvo.”

However, he points out the provincial government would effectively have to negotiate doing so with industry stakeholders.

“I can’t imagine the oil and gas companies are going to be super pleased with having contracts restricted, and shipments restricted. It’s going to cost them money, even if you say, ‘Well look it’s a little bit of short-term pain for long-term gain.’ I suspect though every party at this point will be circumspect at what they do, but here’s the thing. If Alberta decides to use [Bill 12], then BC’s going to sue and then we’re off to the races. So you know, it could escalate very quickly.”

What is the likelihood of Alberta enforcing the new bill? Moscrop says it’s hard to say at this point, but admits it’s possible.

The BC government has come under fire for delaying the Trans Mountain pipeline expansion since it announced it was restricting bitumen shipments pending environmental reviews. Moscrop says the dispute could not only sour relationships between BC and Alberta, but could also put strains on its relationship with others.

“You’d probably have to look at have to look at it case by case,” he says. “It sours the relationship with the federal government a little bit.”

However, he says this probably improves things with Quebec, where he says observers may be looking at this situation as a test of what the federal government can force provinces to do. “And what provinces can get away with when they disagree with the federal government and another province.”

The BC government says 1,186 provincial permits are required for the Trans Mountain expansion project and to date:

  • 748 permit applications have been submitted to permitting agencies
  • Of these, 212 have been approved and permits issued
  • The remaining 536 submitted permit applications are being reviewed
  • Another 438 permits have yet to be submitted by Kinder Morgan Canada Ltd.

Bill 12 and BC gas prices

Meantime, experts say Alberta cutting off its oil supply to BC will certainly have an impact on gas prices on the Lower Mainland which have already broken records.

“A couple of things to keep in mind, and I’m using April as an example,” explains Dan McTeague with GasBuddy.com. “It’s really critical that people understand this. In the month of April, Vancouver imported 900,000 barrels of gasoline. There’s 159 litres in a barrel, so you can imagine a situation where some 60,000 barrels of product like gasoline and diesel or even jet fuel are somehow interrupted.

“That wouldn’t just mean potentially half of the gas stations no longer supplied in the Lower Mainland, it would also mean Parkland would be affected as its crude supply of lighter crude will also be affected.”

He says if the pipeline is blocked 100 per cent, even American refineries would also be impacted.

“They bring in about 30,000 barrels of heavy oil from the Trans Mountain pipeline almost daily, so there is really no positive out of this and the pain will be felt both in terms of a lack of product as well as much higher prices.”

Horgan has threatened that his government would sue should Alberta move forward with its new legislation. His threat came the same day the federal government announced it would offer financial protection for Kinder Morgan’s investors in the pipeline expansion dispute, a move he believes puts unnecessary taxpayers’ money at risk.