Alberta Premier Rachel Notley is looking at an outright government purchase of the Trans Mountain pipeline to ensure its planned expansion is completed to ship more oil to Asia-Pacific markets.
In the escalating battle over the oil sands pipeline project, the Alberta Premier signalled on Tuesday she could put provincial taxpayers’ money on the line in an attempt to gain much-need export capacity, while British Columbia Premier John Horgan dismissed that strategy as irrelevant to his government’s concerns about environmental impacts of potential oil spills, and accused the pipeline proponent, Kinder Morgan Canada Ltd. of trying to create a political crisis in Canada.
However, Ottawa has yet to spell out how it will win over B.C., or ensure the pipeline is built without the province’s support.
Kinder Morgan has warned that if British Columbia continues to throw legal roadblocks in the way of the pipeline-expansion plan, it could be forced to pull the plug on the $7.4-billion project. The company’s Houston-based parent has set a deadline, saying it needs financial protection for shareholders and an end to the B.C. government’s threats of obstruction by May 31.
In response, Alberta and Ottawa – who both argue the project is in the national interest – have said they are open to exploring financial support and other rescue options. Any move by Alberta − with or without federal backing − to invest in the project could also put billions of dollars of public money at risk.
Ms. Notley provided more clarity on Tuesday about the investment her government is willing to make should Kinder Morgan decide it can’t move forward with the project.
“We are considering a number of financial options to ensure that the Trans Mountain expansion is built, up to and including purchasing the pipeline outright if it was to come to that,” Ms. Notley said in a statement provided to The Globe and Mail.
“But it is not the only model we’re considering. Obviously the best interest and outcomes for Albertans will be front and centre as we explore these options.”
Ms. Notley’s office did not provide any dollar figures. Her statement came the same day that the federal cabinet held an emergency meeting on the pipeline project.
Speaking in Toronto late Tuesday, Finance Minister Bill Morneau said the federal government is “thinking about all the means that we have at our disposal to ensure that the project gets done.”
Natural Resources Minister Jim Carr has indicated that Ottawa is reviewing a variety of legal and regulatory strategies, as well as its financial options. These could include loan guarantees and direct investment, a government source said on Tuesday.
Mr. Carr had little to say after the two-hour cabinet meeting, other than reiterating the government is examining its options.
“The government is 100 per cent behind this pipeline; it’s important for Canada; it was made in the national interest; we believe it is important for all regions of the country; we stand behind our decision,” he told reporters.
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The Alberta Premier will meet with federal Finance Minister Bill Morneau in Toronto on Wednesday, as officials from the three governments confer by phone on possible solutions to the impasse. Ms. Notley has also pledged to introduce legislation next week to retaliate against B.C. with trade sanctions.
Premier Horgan gave no indication he is willing to back off his government’s opposition to the project, except to repeat an offer to ask the courts to rule on the extent of the province’s regulatory jurisdiction. Such legal action would take months to conclude and is clearly not in keeping with the tight deadline laid down by Kinder Morgan on Sunday.
The B.C. Premier was dismissive of Alberta’s talk of buying into the Trans Mountain project.
“Certainly the Premier of Alberta is entitled to do whatever she wants within her borders. If she wants to invest in a pipeline, that’s her business,” he said.
“I would prefer she invest in refining capacity so we can bring on more supply and assist British Columbians and Canadians in reducing the cost of gasoline while we transition to a more sustainable energy commodity that will allow us to meet our climate objectives.”
He also criticized Alberta’s planned retaliatory legislation in response to B.C. opposition to the expansion of the Trans Mountain pipeline.
“I don’t believe legislation that would put an adverse impact on the people of British Columbia is in anyone’s interest, and I am surprised that the government of Alberta is bringing it forward,” Mr. Horgan told a Tuesday news conference in Victoria.
He accused Kinder Morgan of an intentional bid to cause crisis in Canada for its own advantage.
“I do believe the company, the Texas-based company that you refer to, is deliberately trying to dial up crisis within our Canadian federation. I think that’s disappointing,” Mr. Horgan told a reporter who raised the issue.
The proposed expansion of the existing Trans Mountain pipeline would allow Alberta to nearly triple shipments of oil and refined products to a terminal in Burnaby, B.C., bringing enough scale to the line for significant exports to overseas markets to become commercially viable – and relieving shipping constraints that have contributed to hefty price discounts on Canadian oil.
Some First Nation communities and residents of the B.C. Lower Mainland oppose the project because of the increased tanker traffic and oil-spill risk it would bring to coastal waters. Environmentalists also believe federal approval of the project is at odds with Canada’s greenhouse gas reduction commitments.
Ms. Notley, who only got the news on Saturday that Kinder Morgan would bring down its ultimatum on Sunday, said this week that the fight over the pipeline is bordering on becoming a constitutional crisis. She has asked Ottawa to inflict some kind of economic pain on B.C., including cutting off payments under the national climate strategy.
Alberta United Conservative Party leader Jason Kenney − who backs Ms. Notley’s proposal to purchase the pipeline if necessary − is also demanding Ottawa slash federal payments to British Columbia, noting it has done so to Saskatchewan for failing to implement a carbon price.
With files from Kate Hopwood in Toronto.