We may never know what really happened to originally scupper planned pipeline talks between Premiers Alison Redford and Christy Clark earlier this week. And what changed in less than 12 hours to ultimately bring the pair together to announce that they had found common ground on the five conditions B.C. had established for pipeline development in the province.
But there is certainly more to the story than we’ve been told.
It was suggested that Alberta stepped back from negotiations because it didn’t have the assurances it needed that royalties were off the table – and until it did, the government could not agree to Condition Five. That is the provision which concerns B.C.’s desire to see greater economic benefits from pipelines in exchange for the environmental risks the province would be assuming. But B.C. had agreed to that royalties caveat ages ago.
So what was it?
It had become evident long ago that if B.C. wanted greater gains from pipelines, it was going to have to find other ways to skin the economic cat. And the most obvious way to derive that financial compensation was from the pipeline builders and oil producers themselves in the form of transit fees or export levies.
Ms. Redford was on the record as suggesting this very thing. If B.C. felt it needed something more, monetarily, from proposed pipelines, she had said, then that was a conversation the province needed to have with the project proponents. If that was the case, why was it so hard to draft language around that sentiment? Why the hesitation with putting it in writing?
Beyond that, why, in the behind-the-scenes talks that were going on, did it appear, to B.C. anyway, that Alberta was always changing its position on Condition Five? One red flag that Alberta officials threw up, for instance, was around the worry they had that Ms. Clark wanted their government to negotiate financial benefits with the pipeline companies on B.C.’s behalf. B.C. had never indicated any such thing, according to a B.C. official with knowledge of the talks. To B.C., it increasingly looked like Alberta just didn’t want to have anything to do with this particular condition of the agreement.
I suspect that any reluctance Alberta was showing was at least partly connected to the upcoming date Ms. Redford has with her party. She faces a leadership review at the Progressive Conservatives’ convention later this month, and while she is not in any danger of being tossed from her job, she does not want to give delegates or political enemies any ammunition in advance of the gathering.
The politics that surround this new accord with Ms. Clark do not favour the Alberta Premier. Astutely, she did not want to be seen endorsing a provision that could end up hurting Alberta energy companies. She did not want to be viewed as backing a rider that could even impact Alberta revenues – in as much as any measures that reduce the profits of those companies shipping the oil will impact royalties paid to the province.
But she could not argue that B.C. didn’t have the authority to negotiate with others for a greater share of the pipeline pie. And so in order to clear the path to pipeline peace and eventually get Alberta oil to tidewater on the West Coast – not to mention snag a key signatory to her national energy strategy – Ms. Redford agreed to the language around Condition Five that was announced Tuesday.
“On condition five,” it says, “Alberta agrees that B.C. has a right to negotiate with industry on appropriate economic benefits. Both governments agree it is not for the governments of Alberta and B.C. to negotiate these benefits. Both provinces reaffirmed that Alberta’s royalties are not on the table for negotiation.”
While she doesn’t specifically endorse B.C. tapping pipeline builders and producers for more money, she has tacitly accepted the strategy. And that, to many, will be seen as a validation of a scheme that could cost the province millions.
But to my mind, Ms. Redford didn’t give B.C. anything it didn’t already have. That is, the right to negotiate directly with pipeline builders and oil producers. In the process, she may have given a little to potentially gain Alberta a lot. If pipelines do reach the West Coast one day, it may be that the politically fraught move she made is the reason why.