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Danielle Smith: Will $2 gas convince B.C. they need Trans Mountain?

Kinder Morgan Trans Mountain Expansion Project's Westeridge loading dock is seen in Burnaby, B.C., on Friday, Nov. 25, 2016. .
Kinder Morgan Trans Mountain Expansion Project's Westeridge loading dock is seen in Burnaby, B.C., on Friday, Nov. 25, 2016. . THE CANADIAN PRESS/Jonathan Hayward

People have been asking me to explain how Vancouver residents can be so up in arms about the Trans Mountain pipeline and yet be completely silent on Vancouver Airport’s plan to build a dedicated aviation fuel pipeline. Where are the protests against that?

As Calgary Herald business columnist Deborah Yedlin told me yesterday, the points the airport makes in its justification for the line and efforts to mitigate potential problems mirror the arguments Kinder Morgan is making to justify its line.

READ MORE: Support for the Trans Mountain expansion grows amidst pipeline dispute

LISTEN: Deborah Yedlin talks to Danielle about Bill 12 and Kinder Morgan

Why the double standard? I couldn’t explain it. So, I asked GasBuddy’s Dan McTeague if he could.

It turns out, it is not uncommon for an airport to build its own supply line in order to contain costs. As one of the busiest hubs in North America, the YVR Vancouver International Airport (YVR) uses a lot of aviation fuel. So they are building a $150-million fuel terminal and 15-kilometre pipeline that will allow it to source its fuel from Asia.

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READ MORE: Justin Trudeau greeted by Trans Mountain pipeline protest in London ahead of meetings with Theresa May, Queen

LISTEN: Gas Buddy’s Dan McTeague talks about the Vancouver Airport Pipeline

Why Asia? You might have thought, like I did, that Asia was going to be a buyer and not a seller of fuel.

Aviation fuel falls into a special category. There is not as much demand in Asia for it as there is for diesel and gasoline so they are happy to export the excess. And yes, that means the Vancouver airport will be getting the product in by tanker.

As for why Vancouverites have no problem with this: it could be because it will add just another tanker or two a month to the massive amount of traffic that already goes into the harbour. It could be that Vancouverites have no problem with refined product and they just hate diluted bitumen. Or, it could simply be that they are willing to accept the risk because it benefits them to have lower cost international air travel.

I hate to say it, but the last is probably most on point. That’s why the Alberta Government’s Bill 12 might just stand a chance of turning the tide of popular support in B.C. (though the BC government claims they can fight this bill, my other guest on Tuesday, lawyer Ian Blue, said it is a well-written law and unlikely to be overturned.)

Danielle Smith: Action needed to solve Trans Mountain impasse

LISTEN: Ian Blue, senior counsel and advisor on energy and regulatory law, Gardiner Roberts on Bill 12
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Add to this, an Angus Reid poll on Wednesday shows support for the pipeline firming up– even in B.C. When asked if the B.C. government should just move on if it loses its jurisdictional fight with Ottawa, 69 per cent of British Columbians agreed.

What is swaying the opinion? I suspect it has something to do with gas prices. Although my previous guest, independent economist Robyn Allan, stated that B.C. doesn’t have a supply problem, there is plenty to suggest they do. YVR’s decision to build its own aviation fuel supply line and the current amounts of fuel that come in by tanker, rail and truck are two indicators. If you could get everything you needed from the pipeline, you wouldn’t need these more expensive options.

McTeague said the supply issues have already jacked up B.C.’s gas prices 18 cents a litre above normal. If the Rachel Notley government forces Kinder Morgan to re-purpose its existing line to transport diluted bitumen only, he calculates that could add as much as 48 cents to the price of gasoline in the lower mainland.

Kamloops, Penticton and Kelowna face a more dire reality. Since they rely solely on Kinder Morgan’s pipeline, they are likely to face fuel shortages if refined product exports from Alberta are shut down.

One more point from McTeague: as much as opponents like to argue that the world doesn’t want heavier grades of crude, it turns out they do because they can be turned into more useful products. Vanadium is one byproduct of oilsands mining that may hold the secret to long term battery storage, which would make intermittent wind and solar power more viable. Titanium and zircon are other metals that have considerable market value.

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Perhaps the only thing that can convince British Columbians that they need this pipeline too, is to see gas prices spike to $2 a litre at the pump. It’s a shame it has to come to that.

Danielle Smith can be reached at danielle@770chqr.com

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