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Alberta inches closer to cutting off oil to B.C.


April 17, 2018  


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Alberta edged closer to cutting off fuel shipments to British Columbia, escalating the feud over the stalled $7.4 billion expansion of the Kinder Morgan Canada Trans Mountain pipeline.

The project has pitted Ottawa and Alberta against B.C., and could turn into a constitutional crisis, derail Prime Minister Justin Trudeau’s energy strategy and dent business confidence.

Kinder Morgan said earlier this month it was halting most work on the Trans Mountain expansion project, which was approved by Canada in 2016 but has been beset by legal tussles. The expansion of the pipeline, which extends from Alberta to the B.C. coast, is desperately needed by oil-rich Alberta, which wants to export more of the crude it produces.

But it is vehemently opposed by B.C., which has pledged new environmental rules and a legal challenge, putting construction at risk.

Seeking to put pressure on its neighbour, Alberta introduced legislation on Monday that gives it the power to control what products flow through export pipelines, allowing it to prioritize more valuable crude oil shipments over refined fuels, like gasoline.

That could hurt B.C., which uses Alberta’s refined fuel. Trans Mountain is the only pipeline in North America that carries both crude and refined fuel products.

“We did not start this fight, but let there be no doubt we will do whatever it takes to build this pipeline,” Alberta Premier Rachel Notley told Reuters.

B.C. environment minister George Heyman said in response that his government was “prepared to defend British Columbians’ interests with every legal means available.”

On Sunday, Trudeau pledged financial aid and said his government would draft legislation to reaffirm federal jurisdiction over the issue.

(Reuters)