Notley ready to restrict oil if opposition continues
Alberta Premier Rachel Notley threatened Wednesday to cut off oil shipments to British Columbia “very quickly,” as her government passed its controversial new law that grants it sweeping new powers over oil and gas shipments.
Notley said she would use the law, introduced last month, if construction does not begin on Kinder Morgan Canada’s $7.4-billion Trans Mountain pipeline expansion soon.
“Albertans, British Columbians and the rest of Canada should understand that if the path forward for the pipeline through B.C. is not settled soon, I am ready and prepared to turn off the taps,” Notley said in her most direct threat regarding B.C.’s opposition to the pipeline.
Alberta says the law is necessary as all pipelines leaving the province are full, which has resulted in Canadian oil being heavily discounted relative to U.S. and global oil benchmarks. “Alberta has the right to act in the public interest to reduce the cost to the treasury,” Notley said.
Canadian heavy oil traded at a discount of $19.19 per barrel on average Tuesday, according to GMP FirstEnergy. Scotiabank estimates that the Canadian economy would lose $15.6 billion this year if heavy oil prices were discounted by US$24 per barrel, and called the situation a “self-inflicted wound” in a report in February.
Notley cited the economic impact as she indicated a move to cut off all shipments to B.C. could be imminent.
If Alberta does make such a move, the result would be an immediate increase of 30 to 45 cents per litre in Vancouver, GasBuddy senior analyst Dan McTeague said. The current average wholesale price of gasoline in the Vancouver area is $1.56 per litre, he said. The additional costs would bring the cost to fill up a typical 60-litre-tank car in the area up to $120.