There was more noise added to Kinder Morgan’s Trans Mountain project this week, which started with the pipeline summit in Ottawa that revealed just how far apart British Columbia and Alberta are on this file.
The B.C. government remained committed to taking the case for jurisdiction to the province’s supreme court, while on Monday the Alberta government introduced Bill 12, the legislation with the power to restrict exports of oil and refined products.
The legislation is cleverly worded to ensure that B.C. is not mentioned, but focuses on where oil can be exported in order to get the highest price.
But just to make things a bit more complex, on Thursday the Supreme Court of Canada came down with a ruling on the flow of beer and wine between provinces.
The top court upheld the New Brunswick Liquor Control Act that limits the purchases of alcohol that can be brought into the province.
And while there is the possibility that this could cause problems for Premier Rachel Notley’s new legislation, there is also another way to look at this:
Thanks to former premier Peter Lougheed, resource development remains under provincial jurisdiction and the legislation passed this week is basically to ensure Alberta gets the best price for what is produced here. The laws of supply and demand will dictate price — and if that means a higher price in B.C. because barrels might be allocated elsewhere, that’s just the way the economics work.
But Notley, speaking Thursday at a charity dinner sponsored by Calgary’s B’nai Brith, was very clear her government is not backing down.
And, rather than have the discussion continue to pit B.C. against Alberta, Notley’s remarks were clearly meant to elevate the discussion to a national level.
“Our ability to share our resource wealth is threatened by delays to the (Trans Mountain) pipeline,” said Notley. “Every single day that goes by without the Trans Mountain expansion being completed means more revenue evaporates from Alberta and it reappears … south of our border.”
There was a letter to the editor published recently, written by someone from Seattle, pegging the benefit to the United States because of the discounted price at US$100 million per day.
That is not pocket change, nor is the $40 million in revenue lost on a daily basis because of the barrels not being sold at world prices.
Notley went on to make her case, using the example of Alberta’s role in federal transfer payments.
“Alberta sends $22 billion more to Ottawa than we receive in return, even after the downturn,” said Notley.
On a per capita basis, the numbers are even more stunning.
Residents of Saskatchewan send $554 more per person than they receive. For Ontario, the number jumps to $650 and is $886 for B.C.
But for Alberta, the difference is eye-popping, almost six times that of B.C. at $5,148.
That’s a strong message to send to Ottawa; if it wants to continue to get help for its transfer payments from Alberta, it needs to step up its game to ensure the Trans Mountain project is built.
And that was the other bit of noise added to the mix this week.
Not only is Ottawa looking to negotiate a financial transaction with Kinder Morgan, with a view to de-risking the project, it said it is going to introduce legislation that will ensure it has the ability to assert its jurisdiction over the project.
In addition, both Alberta and the federal government are looking at taking financial interests in TMX as a way to decrease the risk.
If it does become a Crown corporation, with the federal government taking a 50.1 per cent interest, with Kinder Morgan and potentially other companies coming board in a Syncrude-type model, then the project is likely to become immune to provincial and municipal laws.
If the prime minister wants to do an end-run on Premier John Horgan, this would be the way to do it.
As usual, the hypocrisy and myopia in B.C. are beyond comprehension.
Consider that 33 per cent of fossil fuel consumption goes towards cars, trucks, trains, ferries and planes. But speaking of planes, and hypocrisy, here’s a good one:
The Vancouver airport currently gets 40 per cent of its jet fuel from the Parkland refinery, delivered via a pipeline operated by Kinder Morgan. The rest is brought in by 25 to 45 tanker trucks a day, from the Cherry Point refinery in Washington state.
Don’t even start with the risks associated with that form of transportation, let alone the carbon footprint.
In 2007, a not-for-profit company owned by a consortium of commercial airlines serving YVR bought a wharf on the Fraser River.
And last year, it began building a tank farm to store jet fuel that will be brought in from Asia on 65,000-tonne ships.
The jet fuel will reach the airport via a 15-kilometre pipeline, which follows existing transportation corridors (sound familiar?). Where it crosses a waterway, in this case the Moray Channel, the pipeline will be drilled in a way that mitigates potential environmental impacts.
So let’s get this straight: it’s OK for B.C. to import jet fuel from Asia — and let’s not talk about that carbon footprint — and then ship the fuel via a newly constructed pipeline to YVR, but it’s not OK for TMX to build an expansion to its existing line?
Imagine the outcry — and economic impact — if the 55 airlines that service the airport were unable to source jet fuel. Vancouver’s airport has an economic impact of $1.7 billion on the Canadian economy and generates over $700 million in tax revenues for federal, provincial, and local governments.
And the energy sector?
Oh yeah. It contributes $187 billion to the country’s GDP — almost 10 per cent.
That’s why it’s critical this discussion has been elevated to a national level.
“We are one country and it’s time we acted like one … we cannot let extremes on the left or the right pull our country apart,” said Notley on Thursday night.
This is about the country and its future well-being and goes far beyond a squabble between two provinces. There is too much at stake.
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