British Columbia moved to block the Kinder Morgan Trans Mountain pipeline expansion through the announcement of its new plan to limit any diluted bitumen, or dilbit, from entering the province via the pipeline. The announcement prompted a domestic trade war — Alberta retaliated to BC’s announcement by suspending negotiations regarding Alberta buying BC’s electricity and by blocking BC wine imports.

 

Environmental concerns

Quoting the potential environmental and economic impacts, the province of BC recently announced new plans to restrict any new dilbit, originating from the petroleum deposits in Alberta’s oil sands, from entering BC. The minister of environment and climate change strategy, George Heyman, announced these plans on January 30, telling CBC News that “it’s clear from our perspective that there is a tremendous risk to our economy and our environment from a spill of diluted bitumen. British Columbians expect us to defend out coastline, our waterways in the interior of the province, and our economic and environmental interests overall.”

The restriction hinges on the province’s understanding of how a dilbit spill may be contained to minimize environmental damage. To this end, an independent panel launching in February has been commissioned to deliver a report on the province’s ability to clean up such a spill. It is estimated the report may take two years to submit.

Such a restriction on the flow of dilbit would effectively inhibit any pipeline expansion through the province.

 

Domestically offended

While environmentalists, Indigenous leaders, and BC politicians such as Andrew Weaver, the leader of the BC Green Party, hailed this new move, the announcement brought fury from Alberta, from where the diluted bitumen is found, extracted, and shipped.

Alberta’s suspension of talks with BC regarding electricity purchases could cost BC half a billion dollars per year. Albertan consumption of BC wine also makes up about 0.34% of BC’s exports to the province (about $61 million).

Rachel Notley, Alberta’s Premier, Tweeted that “the Govt of BC is now grasping at straws [to block the pipeline expansion].” She warned that the restriction is threatening thousands of jobs and called it “unconstitutional.”

“Job creators need to be able to trust law makers,” she said. “Today’s announcement suggest that in BC they cannot. British Columbians — indeed all Canadians —deserve better.”

The recent uncertainty is a cause for concern for Rachel Notley’s Albertan government, which must see more pipelines built to help with the deepening discounting and cuts against Canadian, and specifically, Albertan oil.

These cuts exist because Canadian oil is “sour,” meaning that it is high in sulphur content, thus requiring a price discount on the markets to sell. Other blends of oil, such as the Brent blend from Europe, are “sweeter” due to a lower sulphur content, and thus produce less harmful by-products and increase efficiencies when used. Pipeline constraints add costs and losses to Canadian oil producers on top of existing cuts, resulting in the ongoing push and shove between Alberta and both BC and the federal government.

Alberta’s economy is showing signs of a recovery from the recent dip in oil prices, and companies are continuing to push production, as seen by the ramp up of production at the new Fort Hills project, north of Fort McMurray.

The completion of the Trans Mountain Pipeline expansion project would triple the capacity of pipeline.

 

Protests continue

In the midst of the confrontation between governments, local protesters have continued their stance against the project. Pipeline protesters blocked off pipeline workers’ access to the Westridge Marine Terminal for the ninth time. “We will do this as long as we need to,” said protester David Mivasair. “We expect that his project will get shut down one way or another.”

Police have continued to arrest some protestors, with two elderly Indigenous women being forcibly arrested on January 10, based on a warrant “in relation to an obstruction investigation.”

For his part, Kinder Morgan Canada president Ian Anderson commented that “[he] never wanted to be the nexus of a trade dispute between provinces, but it’s certainly speaking to the severity of the matter.”

“I drink BC wine myself so I’m not going to be having any anytime soon if this continues,” he added.

 

With files from The Globe and Mail, CBC News, and Global News.