Reduced refinery capacity only way to slow flow to B.C., economist says
EDMONTON The Alberta government’s pledge this week to lower oil shipments to B.C. in a move reminiscent of former premier Peter Lougheed has economist Andrew Leach scratching his head.
Ask him what the economic hit to B.C. or Alberta might be in such a scenario, and he pauses for a moment.
The plans by the government are, at this point, quite vague. Premier Rachel Notley said Thursday the idea is to give Alberta maximum flexibility as it keeps a close eye on what B.C. is up to.
“Our focus is getting people’s attention on the matter. We’re not interested in creating a crisis in any way,” she said.
Leach doesn’t see how the gov- ernment will execute a plan to limit oil shipments to B.C., so trying to figure out an economic impact is tough.
He likens it to Alberta deciding it will import unicorns from Montana, then debating whether our province has enough horse trailers to transport them all — rather than talking about the non-existence of unicorns.
“The question here is, how will they do this?” he said Friday.
As far as he can see, the only way Alberta could have an impact on how much product moves to B.C. would be by restricting total refinery production — and that, he says,
will be a tough sell for Albertans.
Leach said the plan could be economically feasible, “but if you’re worried about marketing to B.C., you’d have to cut production way, way back.”
Notley pointed out Thursday
that the Lower Mainland of B.C. is particularly vulnerable to high gas prices, and fuel analyst Dan McTeague pointed to possible $2-per-litre gas prices if petroleum exports to B.C. were restricted.