If BC stops pipeline, it’s political war with Canada, Alberta

Trans Mountain Expansion
Green Party leader Andrew Weaver, left, shakes hand of John Horgan, BC NDP leader, at Monday press conference to announce Green support for NDP minority government. Photo: CBC.

If Premier Horgan uses provincial powers to deny authorizations to Kinder Morgan, Prime Minister Trudeau must respond with full power of Canadian government

Green Party leader Andrew Weaver says opposition to the Trans Mountain Expansion pipeline was “critical” to both he and John Horgan, who needs the former climate scientist’s support to become premier. If a BC NDP government uses provincial authorities to try to stop construction, slated to begin this Sept., then Prime Minister Justin Trudeau must not only enforce the authority of the Canadian government to support the project, but punish British Columbia in the process.

Trans Mountain Expansion
Trans Mountain Burnaby Now photo by Cornelia Naylor.

As regular readers know, my experts say the federal government has sole jurisdiction over inter-provincial pipeline approval and regulation. This authority it set out in Sect. 92 of the Canadian Constitution and was first affirmed by legal precedent over 70 years ago.

Contrary to the belief of many BC New Democrats, the Province never had – and likely never will unless the Supreme Court of Canada radically re-interprets Sect. 92 – the right to say “no.”

Rescinding the agreement with Canada and reasserting the right to conduct provincial environmental assessments won’t magically give BC powers it never had.

Nor should it have those powers.

The Trans Mountain Expansion pipeline is in the national interest, for two reasons.

One, access to new markets is critical to the expansion of the Alberta oil sands, which is in turn critical to the Alberta economy.

Trans Mountain Expansion
Suncor MacKay River SAGD well head in the oil sands

The Conference Board of Canada reports estimate the direct and indirect benefits to Alberta from 2012 to 2036 at 441,232 person years of employment, $120 billion to the provincial GDP, and $19.4 billion to the provincial treasury.

Those are material, significant benefits to Alberta taxpayers, businesses, and workers. No province should be able to hold for ransom the economy of its neighbour.

Two, the authority of the Canadian government is in question on a number of fronts.

Kinder Morgan’s project passed the the National Energy Board review. Accusations that the process is broken are nonsense. Eco-activist and First Nation opponents engaged in the equivalent of an internet server “denial of service” attack, overwhelming the public review process with intervenor requests, then claiming the system was inadequate.

“If you looked at the last five years, all the criticism directed at the NEB process is not specific to any error the board made in its judgement or in its procedural choices,” said former NEB chair Gaetan Caron, now a fellow of the School of Public Policy in Calgary, said in an interview.

Trans Mountain Expansion
Gaetan Caron, former NEB chair.

“The fundamental criticism directed at the NEB is a direct criticism of the policy choices under the terms of Mr. Harper’s government approach to climate change.”

Caron argues that pipelines became proxies for climate change and were accordingly targeted by eco-activists, forcing the NEB to try to accommodate public input it was never designed to accommodate.

But that argument ignores the very real concerns of many British Columbians about a significant pipeline spill along the right of way or from an oil tanker in the waters off the West Coast. These are legitimate concerns and should not be dismissed by Alberta or Ottawa.

Nor were they.

Whatever one may think of the public input process, Caron and other observers say the technical review of Trans Mountain Expansion was exceptional. Just because pipeline opponents don’t like the NEB’s approval doesn’t make the review illegitimate. The authority of the Canadian government stands behind that review and a new BC government doesn’t get to flout that authority with impunity.

Trudeau has his own dog in this fight.

Trans Mountain Expansion
Alberta Premier Rachel Notley and Prime Minister Justin Trudeau shaking hands.

His government is forecast to run budget deficits of $113 billion over four years. The only ready source of tax revenue is an expanding oil sands. The Conference Board of Canada estimates Ottawa would enjoy $46.7 billion fiscal benefits from Trans Mountain Expansion alone, and the Canadian Energy Research Institute calculates the total Canadian tax take from the Alberta oil sands over the next 20 years at greater than $400 billion.

No prime minister in his right mind is going to forego that sort of tax revenue.

And if Trudeau allows his government to be bullied by soon-to-be Premier Horgan over Trans Mountain Expansion, then he can say goodbye to the 1.1 million b/d Energy East project – the 4,600 pipeline from Alberta to the Maritimes –  currently beginning its NEB review.

Can you imagine Quebec supporting a pipeline after British Columbia was allowed to reject one?

And what of Trudeau’s prized climate policies, sold to Canadians as part of the plan to build legitimacy for energy infrastructure projects? An idea over 80 per cent of Canadians agree with, by the way, according to Abacus Data polling.

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The national carbon tax, methane emission reduction regulations, and future climate policies would be thrown into chaos. Where would be the incentive for Alberta and Saskatchewan to support them?

No, if Horgan and Weaver throw the weight of the BC government against Kinder Morgan – denying permits and access, hiking rates, obstructing at every turn, the only options they have – then Trudeau must return fire.

And much heavier fire.

Trudeau must demonstrate to the provinces that he is prepared to defend the integrity of federal institutions and approvals, willing to back up industries that have every legal and moral right to operate in this country.

That’s right, Alberta has a moral right to ship oil sands crude to Asian markets from the West Coast without interference from British Columbia.

Under NDP Premier Rachel Notley, the Alberta government has built a solid working relationship with oil sands producers, who helped drafted the controversial 100 megatonnes emissions cap and the “output-based allocations” regulations to implement it.

Already oil sands producers are preparing to implement new technologies to replace natural-gas generated steam with solvent, potentially lowering the carbon-intensity of oil sands crude to that of any other average crude oil.

And Alberta is studying – and should implement – the idea of subsidizing the construction of partial upgraders that would turn the gooey bitumen into medium to heavy crude that would not require 30 per cent diluent to flow in the Trans Mountain Expansion pipeline, thereby doing away with dilbit, which is one of the chief complaints of Kinder Morgan opponents.

For all these reasons, Horgan and Weaver should keep their powder dry. But if it’s war they choose, then it’s war they should get.

Political scientist Keith Brownsey of Mount Royal University says Trudeau has too much riding on this looming battle to fail. And he has plenty of weapons to pressure Horgan.

“The Prime Minister can call up the Premier and be negative, maybe cancel federal projects in British Columbia. Or maybe cheques to the Province get lost in the mail,” he said in an interview.

For fiscal year 2017/18, Canada is scheduled to transfer $6.66 billion to BC for health and social spending. Prime Minister Trudeau should tuck that cheque back in his desk until Horgan and Weaver come to their senses.

The other $1.7 billion pencilled in for BC? Same fate as the other cheque.

Federal support for highway construction, infrastructure improvement, etc.? Nope.

And if Horgan and Weaver persist, then British Columbians should recall the threat by Jim Carr, natural resources minister, to call in the RCMP – and the army if necessary – to ensure that Trans Mountain Expansion gets built.

British Columbians, in the persons of their political leaders, should yield gracefully on the Kinder Morgan pipeline, knowing its critical importance to Canada and Alberta.

But if they do not, then they should suffer the consequences. And I say that as a resident of British Columbia.

13 thoughts on “If BC stops pipeline, it’s political war with Canada, Alberta”

  1. Bc would be much more pacified if the bitumen was refined at the source. With the Canadian government receiving $400 billion over 20 years it has the moral responsibility to build government owned refineries at the tar sands, not that oils companies couldn’t chip in.

    1. Such a project would cost the government and private stakeholders far more money than it would make them. Folks need to give up on this pipedream (excuse the pun) of refining oil in Western Canada. It doesn’t make any sense economically. All that would do is add environmental and economic costs and make us less competitive. It doesn’t make sense to refine it in the middle of nowhere when there is good capacity elsewhere closer to where it will be used.

    2. The economics just aren’t there and they are oil sands not tar sands. It’s hard to take you comments seriously if you won’t use the proper terminology but instead choose to be intentionally inaccurate.

      1. Even the Alberta Chamber of Resources, an industry lobby group, admits that the term “oil sands” gained popularity in the mid-1990s, when government and industry began an aggressive public relations campaign to improve public perception of the dirty-sounding “tar sands.”
        Are you having a politically correct argument wiht yourself? They
        were called tar sands until the 1990s until oil companies thought oil sands would sound nicer.

  2. Canadians should ALL shop local. Why should our oil leave by the West coast while dirty middle East oil is brought into the country on the East? Why not just ship from Alberta to Quebec?

    1. Jackie Lilley

      Because Trudeau is afraid to confront Quebec or they would build it the other way Pipelines are needed.

  3. Chris schafer

    There are a hell of a lot of b.c. residents that know we need this.its going through whether you like it or not. Suck it up bitches. If they need security ill come down and do it for free!

  4. Maybe I am missing something here, but I fail to see why there is a problem with transporting or shipping a province’s product to a viable market. After all are there not truckloads of softwood lumber and fresh fruit that are shipped eastward from BC, along with many rail car loads of metals and automobiles from Ontario to other provinces. We all share in the different “talents” of each province and we all benefit from the overall good that this great country offers. With all this internal squabbling we are missing the big picture of how our biggest trade partner is setting itself up to not need our energy resources as much, so it would make sense to all that we find ways to get at other markets to be not only competitive but also to survive.

    1. No matter what, no province should ever have the right to hold up the economy of the country as a whole?? Constitution aside, federal gov’t should use its power to with hold transfer payments? unless they accept their responsibility to the country period!!

  5. Jackie Lilley

    For starters 2 losers do not make a winner.
    All this crap about the pipeline, why do they think stopping pipelines will stop the flow of oil. if they don’t build pipelines it will be transported at a very expensive rate on the rail. Think about it. Railways go through every small town and through the pristine Rockies??? How many have family living near railway?? would you want your family expose to the dangers…I don’t get why people think stopping pipeline will stop oil. it wont

  6. Come to their senses? If they had any senses they wouldn’t belong to the NDP or Green parties.

  7. Well written and resreached mark.. I would hate to see the oil shipped by rail and that doesn’t need anyones appproval

  8. AB supplies upwards of 90% of BC’s refined fuel and crude oil that is refined there. AB has the authority to turn that tap off. What happens then? Or we deny BC natural gas to cross our land? What then? Whether BC likes it or not AB could destroy their economy. Or we would get hurt immensely but BC?

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