B.C. takes pipe­line ob­struc­tion­ism to new level

Ac­tions are un­con­sti­tu­tional and hurt our econ­omy, Ken­neth Green writes.

Saskatoon StarPhoenix - - OPINION -

The NDP gov­ern­ment in Bri­tish Columbia has thrown yet an­other shoe in the gears of Cana­dian provin­cial comity with a dec­la­ra­tion that B.C. will cre­ate a new provin­cial reg­u­la­tory process for pipe­line ap­proval, and will re­strict how much bi­tu­men can be moved through pipe­lines into B.C.

The gov­ern­ment, led by Premier John Hor­gan, also an­nounced it will cre­ate its own “in­de­pen­dent sci­en­tific panel” to eval­u­ate B.C.’s abil­ity to deal with po­ten­tial spills, po­ten­tially tack­ing on an­other two-year de­lay for the Kin­der Mor­gan Trans Moun­tain ex­pan­sion pipe­line. Ap­par­ently, in the eyes of the B.C. gov­ern­ment, the Na­tional En­ergy Board, which has over­seen pipe­line op­er­a­tions and cleanups for 28 years, is not up to the task.

Al­berta Premier Rachel Not­ley re­sponded im­me­di­ately and called the pro­posed ac­tions il­le­gal, un­con­sti­tu­tional and mere “po­lit­i­cal game-play­ing and po­lit­i­cal the­atre.”

Hor­gan’s re­sponse? Ba­si­cally, we’ll see you in court.

Not­ley also re­cently can­celled ne­go­ti­a­tions of a planned pur­chase of elec­tric power from B.C., and re­moved B.C. wine im­ports in Al­berta.

There are three ways to look at B.C.’s ac­tions: a) as a par­tial re­jec­tion of fed­eral con­trol over trans­porta­tion in­fra­struc­ture and use; b) as paral­y­sis-by-anal­y­sis that can drag out the “re­view” process long enough to cause in­vestor flight; and c) as a re­pu­di­a­tion of the Not­ley/Trudeau plan to buy “so­cial li­cence” for pipe­lines with an ag­gres­sive show of cli­mate-pol­icy im­ple­men­ta­tion.

In the first in­stance, B.C.’s ac­tion is clearly a chal­lenge to fed­eral ju­ris­dic­tion over trans­porta­tion. But as law pro­fes­sor Dwight New­man ob­serves, Canada’s Con­sti­tu­tion is crys­tal clear on this point, putting in­ter­provin­cial trans­porta­tion in the exclusive do­main of the fed­eral gov­ern­ment. This as­pect of the Con­sti­tu­tion, New­man notes, has been af­firmed in nu­mer­ous court cases in­clud­ing a 1954 Supreme Court case (Camp­bell-Ben­nett v. Com­stock Mid­west­ern).

New­man makes a pow­er­ful ar­gu­ment that, ab­sent the con­sti­tu­tional prin­ci­ples that give Ot­tawa con­trol over in­ter­provin­cial trans­porta­tion of all sorts, there “very pos­si­bly would have been no na­tional rail­ways, and no Canada to speak of.”

In the sec­ond case, B.C.’s ac­tions can be seen as a tac­tic to slow the pro­posed Trans Moun­tain ex­pan­sion, in­crease its cost and un­cer­tainty, and po­ten­tially change the eco­nomics of the pro­ject. We have seen this play out be­fore, when Trans Canada can­celled its plans for the En­ergy East and Eastern Main­line pipe­line projects due to ad­di­tional red tape an­nounced by the Trudeau gov­ern­ment. Also last month, Kin­der Mor­gan re­it­er­ated that if the Trans Moun­tain pro­ject con­tin­ues to face “un­rea­son­able reg­u­la­tory risk” it may not pro­ceed with build­ing the pipe­line. It’s a well-known tac­tic of en­ergy ob­struc­tion­ists: if you can’t block oil­sands pro­duc­tion, block­ade paths to mar­kets.

Fi­nally, the B.C. gov­ern­ment’s ac­tion is a hard slap at Not­ley’s plans to es­sen­tially buy off pipe­line op­po­nents with an ex­plo­sion of cli­mate change poli­cies, which in­clude ban­ning coal-power gen­er­a­tion, es­ca­lat­ing car­bon taxes, hard caps on car­bon-emis­sion re­duc­tions, ad­di­tional lim­its on air emis­sions from the oil and gas sec­tor, and more spend­ing on ev­ery “green dream” on the wish list of pipe­line op­po­nents. Money will flow to more elec­tric car sub­si­dies, re­new­able en­ergy man­dates and sub­si­dies, even a new agency specif­i­cally fo­cused on en­ergy ef­fi­ciency pro­grams.

And what has she pur­chased for Al­ber­tans with this mas­sive in­crease in tax-and-spend gov­er­nance? Fed­eral ap­proval of two pipe­lines, with al­most zero buy-in from op­po­nents of pipe­line con­struc­tion, in­clud­ing B.C.’s NDP gov­ern­ment. The only ques­tion is how long will Not­ley con­tinue to try to buy the un-buyable at the ex­pense of Al­berta tax­pay­ers?

With its lat­est moves, B.C.’s NDP gov­ern­ment (propped up by the Green Party) has shown it does not re­spect fed­eral author­ity over trans­porta­tion in­fra­struc­ture in Canada, and demon­strated a bla­tant dis­re­gard for the eco­nomic well-be­ing of Al­ber­tans (while gladly using the gaso­line and avi­a­tion fuel Al­berta sells).

B.C. is treat­ing Al­berta like a trad­ing part­ner to be block­aded on a whim.

B.C. is al­ready the low­es­tranked Cana­dian ju­ris­dic­tion for in­vest­ment in oil and gas in the Fraser In­sti­tute’s an­nual sur­vey of up­stream oil and gas ex­ec­u­tives. Now, in ad­di­tion to likely ce­ment­ing its back-of-the-pack sta­tus for in­vest­ment, B.C.’s gov­ern­ment has badly weak­ened in­ter­provin­cial re­la­tions, chal­lenged fed­eral reg­u­la­tory author­ity, and revealed that the con­cept of pub­lic ap­proval is noth­ing but a pipe dream. Ken­neth Green is se­nior di­rec­tor of the Cen­tre for Nat­u­ral Re­source Stud­ies at the Fraser In­sti­tute.

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