Analysis

Oil, water and wine: Escalating Alberta-B.C. feud threatens future of Trans Mountain pipeline

A clash between British Columbia and Alberta over the Trans Mountain pipeline expansion was probably inevitable, but the surprisingly emotional nature of the conflict and its recent escalation makes a compromise less likely.

Dispute between provinces has escalated in recent days

Alberta Premier Rachel Notley, left, announced Tuesday that she would ban wine imports from B.C., whose premier, John Horgan, right, has said his government will block an increase in bitumen shipments while a scientific panel reviews the environmental impact of the Trans Mountain pipeline expansion. (Left: Richard Marion/CBC Radio-Canada, Right: The Canadian Press/Darryl Dyck)

A clash between British Columbia and Alberta over the Trans Mountain pipeline expansion was probably inevitable, but the surprisingly emotional nature of the conflict and its recent escalation makes a compromise less likely.

In the week or so since B.C. proposed new restrictions on bitumen shipments that would flow through the expanded pipeline from Alberta to the West Coast, there have been threats of lawsuits and economic retaliation — and on Tuesday, a move by Alberta to block imports of B.C. wine.

I'm not sure what's happened to the great Canadian reasonableness. That seems to have disappeared.- Bob Schulz, Haskayne  School of Business

A feud between provincial politicians is one thing, but the Trans Mountain conflict is generating worry and anger among residents of both provinces, making an easy or obvious public detente all but impossible.

Even ardent oilpatch supporters admit this doesn't bode well for the future of the project.

"One can't assume that they'll continue with this ad infinitum," said David Yager, an energy policy analyst and small "c" conservative activist in Calgary.

Even before B.C.'s environment minister said the province would look for ways to impose regulations to prevent expansion of bitumen shipments, Trans Mountain's developer, Kinder Morgan, had announced the project's start-up date was being delayed to December 2020 because of ongoing difficulty in obtaining permits.

"They have opportunities in other markets, like all the other companies do," Yager said.

"I'm sure they've got it worked out how long they're going to continue to do this before they … say, 'We're not doing this any longer; we've got other things to do.'

"Hopefully, they won't do that. I can't speak for the company. But the trend is, among companies like that, there is a statute of limitations on how long they're going to put up with this."

Pipes are seen at the Kinder Morgan Trans Mountain facility in Edmonton. Alberta says the expansion project would be a benefit to Canada. (Jonathan Hayward/Canadian Press)

Strip away the political noise, supporters of the $7.4 billion Trans Mountain expansion say, and what you'll find is a sound business case that could hold up in the face of political opposition.

Canadian oil sells at a discount because of limited shipping capacity. The Trans Mountain expansion, which would nearly triple the capacity of the current pipeline system, would not only ease the bottleneck but help Canada's efforts to grow in Asian markets.

Kinder Morgan has made a believer of the market as well. The pipeline expansion has gotten strong backing from lenders, to the tune of $5.5 billion last year. 

Proponents say the project also promises jobs and government revenues. Prime Minister Justin Trudeau has defended it as being in the best interest of Canada.

"This is something where we have to all band together and get this project done because it's in the national interest," Alberta Energy Minister Marg McCuaig-Boyd said this week at a renewable energy conference in Calgary.

But for many opponents of the project — including some members of the B.C. government — there's no compelling economic case to be made, at least not one that outweighs the environmental cost.

The climate change agenda is really important in people's overall understanding of this.- James Lawson, University of Victoria

For them, the threat the project poses to the environment – whether through leaks, spills or impact on climate change – is not something that can be answered with a promise of jobs or money. 

Such polarization makes collaboration hard to accomplish.

"We only have to look further south from us here, where you see people that are way on the right and on the left, and the people in the middle get burned," said Bob Schulz, a professor with the Haskayne School of Business at the University of Calgary.

"That's almost where we're going now on this issue."

Protesters in opposition to the Trans Mountain expansion last October. Protests continue against the project because of concerns over oil spills, leaks and climate change. (CBC)

Schulz said he expects discussions between B.C. and Alberta will get still more complicated.

"I'm not sure what's happened to the great Canadian reasonableness. That seems to have disappeared."

But B.C. politics has always been complicated, and it didn't get any simpler after the NDP took power with the help of the B.C. Green Party last year.

Indeed, it was only a couple of weeks ago that B.C. Green Party Leader Andrew Weaver warned on Twitter that the NDP would lose its ability to govern if it continued to pursue the development of the province's liquefied natural gas industry.

But after Victoria's move to block any increase in diluted bitumen shipments while a scientific panel looks at options for cleaning up a future spill, "[Premier] John Horgan and Andrew Weaver can have better conversations for the next few weeks," said James Lawson, who teaches natural resource and environmental politics at the University of Victoria.

He said the people opposed to the project don't see Victoria's move as posturing. Rather, said Lawson, NDP and Green supporters in coastal urban areas have reacted angrily to Trudeau's pronouncement that the expansion would go ahead, and to Alberta Premier Rachel Notley accusing B.C. of "political game-playing." 

The impact of Alberta and B.C.'s trade war is starting to extend past the two provinces, as the federal government gets involved and people in other provinces begin to pick sides. B.C. Premier John Horgan spoke publicly on Alberta's ban on B.C. wines saying, "I'm not responding in any way other than saying I'll defend our wine industry. I'm here for B.C., not for Alberta" 5:16

Notley also drew ire with last week's suspension of electricity-purchase talks with B.C. and yesterday's retaliatory wine boycott, which B.C. Premier John Horgan described as a "threatening position."

The response might be more nuanced in the B.C. Interior, where local economies are more resource-based. But pipeline issues still resonate because of fears of diluted bitumen spilling into water systems or on land, said Lawson.

"And it's hard to understate the extent to which here in the coast, and particularly in the urban areas, the climate change agenda is really important in people's overall understanding of this," he said.

Prime Minister Justin Trudeau has continued to defend the Trans Mountain expansion project, which has angered its B.C. opponents. (Sean Kilpatrick/Canadian Press)

Entrenched positions and amplified emotions on both sides point to a prolonged battle.

Lori Williams, a political scientist at Calgary's Mount Royal University, said the NDP governments in B.C. and Alberta soon will be facing elections, putting pressure on them to be seen to be standing up for provincial interests.

But she said she believes there's room for a co-operative solution – and that science-backed assurances or federal pledges of help with environmental safeguards might offer an opening.

"When people calm down a little bit, there may be a little bit more openness to some compromise," she said.  

"There will probably have to be concessions on both sides. But … the arena of public attention doesn't lend itself to subtlety and nuance and compromise and so forth. So whatever moves get made in a different direction will have to happen out of the public eye."

In the meantime, the Alberta-B.C. feud continues, with another multibillion-dollar energy project hanging in the balance.

About the Author

Tony Seskus

Senior Producer Western Digital Business Unit

Tony Seskus is senior producer with CBC's Western Business unit in Calgary. He's written for newspapers and wire services for more than 25 years on three continents. In Calgary, Tony has reported on the energy sector and federal politics.

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