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B.C. vows to block Alberta from restricting oil exports amid Trans Mountain pipeline spat

British Columbia is vowing to seek an injunction if Alberta moves to curtail fuel shipments even as the province’s Attorney-General derides the threat as a political stunt.

David Eby, B.C.’s Attorney-General, said his government’s legal experts examined the legislation that Alberta tabled Monday and concluded it’s unconstitutional.

“Clearly the legislation is a bluff,” Mr. Eby said on Tuesday. “They don’t intend to use it. If they did try to use it, we would be in court immediately seeking an injunction to stop them from using it, but we would probably have to get in line behind oil companies that would be concerned about contracts that they have with companies in B.C. to deliver product.”

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The threat of another legal challenge is the latest salvo in an increasingly heated dispute over the future of the $7.4-billion Trans Mountain pipeline expansion, with Alberta and Saskatchewan now allies in the fight to overcome B.C.’s opposition to the project.

Prime Minister Justin Trudeau attempted to mediate that dispute on Sunday, calling a meeting with B.C. Premier John Horgan and Alberta Premier Rachel Notley.

The next day, Alberta introduced legislation giving the province sweeping authority to curtail exports of crude, gasoline and diesel.

Related: Foreign shipments of fuel to B.C. would ease pain of Alberta cuts to energy exports

Asked about the threats from Alberta and Saskatchewan to interfere with inter-provincial energy trade, Natural Resources Minister Jim Carr said only Ottawa can represent the national interest. However, he gave no indication the federal government would intervene to stop them from carrying out their plans.

“Provinces will have their own view for their own reasons,” he said. “They’re expressing that but there’s a national interest which goes beyond the provincial interest. Canadians live in Alberta and British Columbia and Saskatchewan and Manitoba and we speak on behalf of Canada’s interests. We’ve done that and we’ll continue to do that.”

Alberta’s energy industry has greeted Ms. Notley’s proposed legislation with a mixture of grudging acceptance and unease. Some fear that any restrictions could harm producers already coping with pipeline constraints and low prices. Others cheered the legislation as a stand on principle.

The head of the association representing oil drillers in Canada said his members will support any action the Alberta Premier takes to get the pipeline expansion built.

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“If she believes this is going to allow the Alberta government to exert additional pressure to get this pipeline built, we’re fully supportive and we’re behind her,” said Mark Scholz, president of the Canadian Association of Oilwell Drilling Contractors.

The industry endorsement of such a contentious proposal underlines concerns sparked by Kinder Morgan Inc.’s threat to abandon its Trans Mountain expansion by June 1 unless the company gets assurances it can finish the project.

The pipeline would nearly triple the flow of oil sands-derived crude and refined products along an existing right-of-way to the West Coast and is widely seen as a barometer of Canada’s ability to attract global investment in major resource projects.

Mr. Trudeau and Ms. Notley have pledged to provide financial backing for the expansion, although neither has spelled out exactly what form it would take.

They argue the project is key to expanding markets for Alberta’s landlocked oil. But the project faces opposition from B.C.’s government, environmentalists and some First Nations, who insist Trans Mountain poses a threat to the coastline and will undermine Canada’s ability to reduce emissions of planet-warming greenhouse gases.

Known as Bill 12, Alberta’s legislation would give the province broad powers to control what products flow through major export pipelines, enabling it to throttle shipments of refined fuels to free up space for deliveries of crude oil, for example. A spokeswoman for the Premier said it could take up to three weeks for the legislation to take effect.

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Speaking in Edmonton on Tuesday, Alberta Energy Minister Margaret McCuaig-Boyd said the government has received advice from legal experts on Bill 12, and is confident the legislation stands on firm legal ground.

“It absolutely does not target B.C. – it targets exports going in any direction out of this province,” Ms. McCuaig-Boyd said.

Saskatchewan Premier Scott Moe said his province will take similar action. His government plans to introduce a bill within a matter of days that would allow it to restrict oil shipments to B.C. His office said Saskatchewan ships about $375-million worth of refined petroleum products to B.C. annually.

While the threat of squeezing shipments to the B.C. has elicited praise in some corners of the energy industry, there are also concerns it could have unintended consequences.

Major oil companies could take a hit, said Tim McMillan, president of the Canadian Association of Petroleum Producers. “Nobody likes the option put on the table,” he said on Tuesday.

“But everybody believes that we need market access, that no province can hold our resources hostage, and that we have to play the long game.”

With reports from Shawn McCarthy in Ottawa, Justine Hunter in Victoria and The Canadian Press

Greenpeace activists confronted Prime Minister Justin Trudeau in London Wednesday, demanding he cancel the Trans Mountain pipeline expansion project. The protesters put up a fake pipeline and labelled it “Crudeau Oil.” The Canadian Press
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