CAPP opposes threat to cut off oil to B.C. in Kinder Morgan battle

The Canadian Association Petroleum Producers is throwing support behind Premier Rachel Notley's plan to push Trans Mountain forward, but warns certain techniques could harm, not help, industry.

Petroleum producers group does support the rest of Premier Notley's plan to move the pipeline forward

Tim McMillan of the Canadian Association of Petroleum Producers says he supports Alberta pushing for Kinder Morgan's Trans Mountain expansion project. (CBC, Jonathan Hayward/Canadian Press)

The Canadian Association of Petroleum Producers (CAPP) says the threat by Alberta's premier to cut off oil supply to British Columbia is not "the appropriate tool" to pressure the province into supporting the controversial Trans Mountain pipeline expansion.

Cutting oil supply to B.C. to drive up prices would be detrimental to Alberta's oil and gas industry, even though the pipeline's approval would in turn boost the industry as a whole, president and CEO Tim McMillan said after a speech to the Canadian Club in Calgary on Tuesday.

"Limiting energy and damaging the energy industry … we wouldn't recommend that," McMillan told reporters. "Any time that … we limit the ability to access markets is a problem for us and, in fact, that's what this whole fight is about: our ability to access new and growing markets."

Instead, the provincial government should pressure the federal government to solve this debate, he said.

The pipeline expansion was approved by the Canadian government in 2016. Now it's going through a route approval process to determine the exact pipeline placement. The existing Kinder Morgan Trans Mountain pipeline carries oil from Edmonton to Burnaby, B.C.

Governments and residents in British Columbia have said they are worried the pipeline would damage the environment, sensitive ecosystems, green spaces and private property.

In the throne speech last week, Premier Rachel Notley threatened to invoke the ban if B.C. stops or delays the project — worth $7.4 billion — by taking "extreme and illegal actions."

CAPP supports general strategy

Although the Canadian Association of Petroleum Producers is opposed to an oil sanction, the advocacy organization does approve of Notley's broader political strategy, McMillan said.

"We support the premier in her initiative to make the Kinder Morgan pipeline a success and that she's doing a very important job of working with other governments, sometimes using difficult tools," he said.

At a press conference Thursday before the throne speech, Alberta Premier Rachel Notley threatened to retaliate if B.C. continues to try to block the Trans Mountain pipeline expansion. (CBC)

Alberta previously banned B.C. wines after the B.C. premier proposed limiting diluted bitumen shipments while the government studied oil spill risk along the Pacific coast.

Courts best place for debate

B.C. Premier John Horgan said the best route for the Trans Mountain dispute with Alberta is through the courts. 

B.C. has retained lawyer Joseph Arvay to prepare a reference case in the courts to test the province's right to protect its land, coast and waters.

Horgan said B.C. will stick to its legal plan to test its jurisdiction on environmental and economic grounds.

With files from Dave Gilson, the Canadian Press