April 11, 2018 11:52 pm
Updated: April 12, 2018 2:23 am

ANALYSIS: the Kinder Morgan pipeline row is about to get real

Alberta is threatening to throttle the flow of oil to B.C., potentially sending the cost of gas skyrocketing. Ted Chernecki on whether Alberta can actually do it.

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Well, things are about to finally get real over the Kinder Morgan pipeline expansion project.

Oh, the protests against the project and the resulting arrests were all very nice for the television news cameras and all that. And various court proceedings have come and gone, with some still remaining.

Coverage of Kinder Morgan on Globalnews.ca:

However, Kinder Morgan fired a shot across the bow of three different governments this past weekend that brought a number of things into crystal clear focus. The war of words and political protests is about to become something else entirely.

The bombshell announcement that it was suspending all non-essential work on the project and making May 31 the drop dead day for a final decision on whether to proceed pushed the fight for or against the pipeline to new levels.

By establishing such a tight timeline, Kinder Morgan has put enormous pressure on the federal and Alberta governments to act quickly in finding ways to force the B.C. government off its anti-pipeline position, at least in court (Kinder Morgan has fingered the BC NDP government as the chief reason for potentially walking away from the project).

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READ MORE: Justin Trudeau to pressure B.C. government to accept Trans Mountain pipeline

The BC NDP government, for its part, will now have to stand up to what may be serious economic attacks from both Ottawa and Alberta (although it is looking increasingly like it may also be looking for an exit strategy from this escalating mess).

Alberta Premier Rachel Notley was quick to say her government will soon introduce and pass legislation allowing it to limit oil shipments to B.C., a move that energy analysts say could potentially cause the cost of filling up your car to skyrocket.

The legislation is expected to be tabled in the legislature on Monday, although actually enacting it could be weeks and even months away. Notley will put that new law in her back pocket, ready to use it when needed.

Just hours after Kinder Morgan’s announcement, Notley took to social media using language that seems rather foreboding.

She Tweeted:  “Alberta is prepared to do whatever it takes to get this pipeline built — including taking a public position in the pipeline. Put another way, Alberta is prepared to be an investor in the pipeline. This pipeline will be built.”

Then she added, “We will be bringing forward legislation giving our gov’t the powers it needs to impose serious economic consequences on British Columbia if its government continues on its present course. Let me be absolutely clear, they cannot mess with Alberta.”

When she stopped imports of B.C. wine into Alberta, Notley showed a toughness and a resolve that suggests she will indeed follow through on her threats. B.C. motorists should be very worried.

And Ottawa will now have to shift from the prime minister impatiently stamping his feet and demanding that B.C. comply with his edict that the pipeline must be built, to a more aggressive stance that may inflict real economic pain on the B.C. government.

British Columbia Premier John Horgan, back left, and Prime Minister Justin Trudeau listen to his wife Sophie Gregoire Trudeau speak, at the Women Deliver kickoff event in Vancouver, B.C., on Thursday, November 16, 2017.

THE CANADIAN PRESS/Darryl Dyck

B.C. expects to receive almost $9 billion in transfer payments from Ottawa this year, and the federal government is considering reducing them.

I suspect the federal government is loath to go that route, however, at least in any major way. Still, it would not take much of a reduction to tip Finance Minister Carole James’ tiny budget surplus of $219 million into a deficit.

Another option that seems to be gaining in momentum is for both the Alberta and federal governments to invest in the project, and take on the $7.4 billion required to build it.

Over the next seven weeks, all three governments could enter some very dangerous political territory that has potential implications for the rest of the country.

READ MORE: B.C. gas prices could hit $2 a litre if Trans Mountain tensions continue, analyst says

From Ottawa’s perspective, it cannot allow an individual province to supersede federal jurisdictional power as set down by the constitution. Such a precedent could embolden other provinces to defy the federal government on other matters, potentially leading to chaos and a greatly weakened federalism.

B.C., on the other hand, wants to establish a new law that would give provinces veto power over anything it deems to have an impact on its environmental values.

While Alberta and Saskatchewan clearly despise what the BC NDP government is doing, one cannot help but wonder whether other provinces might be secretly cheering the kind of action that could strengthen provincial powers.

In the middle of all this lies the Canadian economy. The stakes are huge no matter what the outcome, but Kinder Morgan’s move has put everything in much clearer focus. Things are finally getting real.

Keith Baldrey is chief political reporter for Global BC.

© 2018 Global News, a division of Corus Entertainment Inc.

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