B.C. in no rush to approve Enbridge Northern Gateway oil pipeline

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Alberta Premier Rachel Notley's softening stance on the Enbridge Northern Gateway oil pipeline project has generated renewed optimism in the oil and gas sector, but it will be many months before the B.C. government may match her shift toward "yes" on the movement of more crude oil across the Rockies.

Ms. Notley said this week her government is in negotiations with B.C. to pave the way for construction of an oil pipeline to the West Coast in exchange for a long-term contract to buy British Columbia's surplus electricity. Ms. Notley indicated she is no longer strictly opposed to the construction of Northern Gateway.

In a statement Thursday, B.C. Environment Minister Mary Polak confirmed negotiations with Alberta are running on parallel tracks – climate and energy – but played down any tradeoffs between the two provinces on those files.

"We continue to work on areas of common interest today, with both the energy and climate files clearly a priority for both provinces," she said.

But Ms. Polak added that British Columbia will maintain its opposition to both Northern Gateway and Kinder Morgan's TransMountain oil pipeline expansion proposal until each of its five conditions is met.

"Progress has been made, but there is more work to do. On the marine front, for example, there are gaps in marine response capabilities that the federal government will need to address," Ms. Polak said. The federal cabinet is not expected to make a decision on Kinder Morgan until December and the B.C. Liberal government wants to see approval by Ottawa before it would move forward.

Although Enbridge continues to work toward meeting the more than 200 conditions attached to its certificate from the National Energy Board, the Northern Gateway project in its current form is expected to stall because the federal Liberal government has promised to legislate a ban on crude oil tankers off the north coast of British Columbia – a measure that would choke off the proposed shipping terminal at Kitimat.

Jeff Gaulin, vice-president of communications for the Canadian Association of Petroleum Producers, said Premier Notley's public remarks on Northern Gateway do reveal a more positive climate in general for the construction of pipelines to get Alberta crude oil to new offshore markets.

"There has been a lot more conversation in recent months about how governments, industry and communities across the country can work better together to build the energy infrastructure that Canada needs," he said in an interview. "We're very encouraged that conversations are ongoing between varying levels of government, and between government and industry."

The governments in British Columbia and Alberta have had frosty exchanges since the Northern Gateway application process began, but recently B.C. Premier Christy Clark's Liberals and Premier Notley's New Democrats have found some common ground in promoting the energy sector on the national level.

However B.C.'s main interest is in gaining federal approval for the development of liquefied natural gas, and Premier Clark's government has demonstrated little concern for the construction of oil pipelines that face strong opposition in parts of British Columbia.

Premier Notley has found new leverage, however, since B.C. proposed to expand the transmission capacity between the two provinces. "I think it's fair to say that the government of B.C. understands that there wouldn't be a market for their electricity if we're not able to get something approaching a non-discounted price for the product that we ship," she told The Globe and Mail earlier this week.

Ms. Polak, in her statement, did not dispute that account but sought to disentangle the two issues: "We see a strengthened B.C.-Alberta intertie for west-east electricity transmission as an opportunity to work together on climate action, in partnership with the federal government."