The governments of Canada and Alberta have taken steps to break the logjam in British Columbia over expansion of the Trans Mountain Pipeline System.
Canadian Finance Minister Bill Morneau said in a news conference May 16 the government would indemnify project sponsor Kinder Morgan Canada Ltd. or a subsequent developer against financial loss resulting from BC’s resistance to pipeline expansion.
Calling opposition to the project by BC Premier John Horgan “unconstitutional,” Morneau said the aim is to “remove politically motivated investment risks.”
The Alberta Legislative Assembly, meanwhile, passed Bill 12 authorizing the provincial energy minister to require licenses for the transport of natural gas, crude oil, or refinery products away from the province (OGJ Online, Apr. 17, 2018).
The legislation would enable the Alberta government to block energy deliveries to BC.
“Albertans, British Columbians, and the rest of Canada should understand that if the path forward for the pipeline through BC is not resolved soon, I am ready and prepared to turn off the taps,” Alberta Premier Rachel Notley said.
Transport congestion is widening the discount at which Albertan bitumen and heavy crude oil sell against West Texas Intermediate crude and is therefore costly to the province’s producers and government.
Kinder Morgan last month suspended most work on the Trans Mountain expansion and set a May 31 deadline for reaching agreements that would allow work to resume (OGJ Online, Apr. 9, 2018).
The project would nearly triple capacity of the system between Alberta and Burnaby, BC.
In Vancouver, Horgan dismissed Morneau’s comments as “rhetoric and hyperbole.”
And BC Atty. Gen. David Eby threatened a legal challenge to any restriction of oil or gas movement to BC under the new law.