Alberta moves to tighten oil taps
Minister to get vast new powers amid bitter pipeline feud with B.C.
Alberta’s energy minister will wield the ultimate authority over crude oil, natural gas or refined fuels being shipped out of the province, under legislation tabled Monday.
Bill 12, The Preserving Canada’s Economic Prosperity Act, gives Energy Minister Margaret McCuaigBoyd extraordinary powers.
Under the act, she can decide if a company needs an export licence to send oil and gas outside Alberta’s borders — and it’s up to her whether or not she’ll grant one.
Each application will be subjected to a public interest test. Once a licence is granted, McCuaig-Boyd will be able to set maximum quantities, dictate how products are shipped (whether it’s by rail, pipeline or road) and the licence period. She will also have the ability to direct an operator to cease transporting natural gas, crude oil or refined fuels altogether.
If companies aren’t happy with her decision, the act’s appeal process means they’ll plead their case to cabinet.
Premier Rachel Notley said at a Monday news conference the legislation won’t be used immediately. In fact, she’s confident it won’t have to be used at all.
Alberta is not turning off the oil taps to British Columbia.
It’s tampering with the oil taps. Or, perhaps more accurately, it will be playing musical taps.
The government’s new Bill 12 introduced Monday does not explicitly mention turning off, or throttling back, the oil spigot to B.C.
Instead, the bill talks of giving the government extraordinary powers to dictate to energy companies what products they can ship out of Alberta.
Sounds benign, even dull.
It’s certainly nothing like the fiery comments from Energy Minister Margaret McCuaigBoyd, who said last week: “We’ve been clear that if the government of B.C. persists in attacking our jobs and economy, they will face serious consequences.”
But the new legislation is neither benign nor dull.
The bill’s more cautious language is merely a more diplomatic and more legally defensible way to fiddle with the oil taps.
The government is keenly aware that if it ordered energy companies to stop shipping gasoline to Vancouver as a retaliatory move in the pipeline war with B.C., the order might be challenged in court as unconstitutional or a violation of the Canadian Free Trade Agreement. It would certainly be seen as mean-spirited, unCanadian and unneighbourly.
That’s one reason why the bill has a warm and fuzzy title, “Preserving Canada’s Economic Prosperity Act,” and not, say, the “Sticking It To British Columbia Act.”
Premier Rachel Notley framed the need for the new law in a circuitous statement Monday morning that talked of “pipeline capacity” and “demand” for bitumen and “decisions that will ultimately amplify the return that we get,” which might “inadvertently impact” the price of gasoline in Vancouver.
Here is her argument as translated by me: “Hmm, China would like more bitumen so we’ll use the existing limited pipeline infrastructure to ship more bitumen to the West Coast. And because the pipelines are busy doing that, we have no room to ship gasoline to Vancouver. We’ll have to transport gasoline by rail. That will take more time and might be more expensive and could even raise the price of gasoline at the pump for motorists in Vancouver. But, hey, that’s beyond our control. Gee, if only we had more pipelines so we could ship gasoline cheaply and quickly to our neighbours in B.C.”
Or, as Notley actually said Monday: “Pipelines are important.”
It’s worth pointing out the bill is not aimed just at pipelines. The government is giving itself the power to control the shipment of energy products by rail and by truck.
Companies guilty of breaking the law will be liable to a fine of up to $10 million a day. Alberta is not messing around. Notley says she’s confident there will be no need to pull the trigger, but she wants the new law locked and loaded, just in case.
The target is B.C. Premier John Horgan and his anti-pipeline government. Notley is hoping the mere existence of the new law will encourage Horgan to back off his passive-aggressive stance that has helped delay Kinder Morgan’s Trans Mountain expansion project and put the jitters into Kinder Morgan investors.
Notley says she will only enact the law if necessary. If she does, and it results in higher gas prices, she’ll be hoping British Columbia drivers will be angrier with their own premier than with Alberta’s. (Public opinion polls have indicated more British Columbians support the pipeline expansion than oppose it.)
Notley is hoping her Plan A will convince Kinder Morgan to withdraw its May 31 deadline to kill the project. Under that plan, both Alberta and the federal government would take some form of equity position in the $7.4–billion project to soothe investors’ jitters. Notley has said she’s even willing to have Alberta buy the whole expansion project outright, if necessary, to get the project built.
The federal government is also looking at a legislative move to reaffirm its constitutional powers to approve and regulate transprovincial pipelines.
Right now, it’s about reassuring Kinder Morgan that the project can go ahead.
For Notley, though, it’s also about demonstrating to Albertans she will be as tough as necessary, even with a fellow NDP premier and personal friend.
“This bill sends a clear message,” she declared at a news conference Monday morning where more than 40 members of her caucus posed as a backdrop. “We will use every tool at our disposal to defend Albertans.”
Those tools now include a piece of legislation with a benignsounding title that is in fact an economic weapon aimed at our B.C. neighbours.