BC Liberal Leader Christy Clark wants to slap a hefty $70-a-tonne carbon levy on exports of thermal coal from British Columbian ports, a move that would devastate producers in both the United States and Alberta while sparking a rift over interprovincial trade.
"I think in the fight against climate change, we all have a responsibility," Ms. Clark said Tuesday during campaigning for the May 9 provincial election.
She is linking her coal-levy proposal to the Trump administration's decision last week to collect countervailing duties on Canadian softwood lumber exports south of the border. British Columbia is Canada's largest lumber exporter into the United States.
The BC Liberals' decision is drawing ire in Alberta, which has clashed in the past with its western neighbour over the now-rejected Northern Gateway oil pipeline project that would have gone through British Columbia.
"It would apply to all because we don't intend to just single out American coal," said Ms. Clark, whose party is in a close race against the BC NDP led by John Horgan. Both parties are fending off a challenge in some ridings from Andrew Weaver's BC Green Party.
Robin Campbell, president of the Coal Association of Canada, lashed out at the BC Liberal Party's coal plan.
"Premier Christy Clark proposed a $70 per tonne carbon tax on all thermal coal shipments travelling through British Columbia, regardless of the point of origin," he said in a statement.
"Premier Clark's proposed thermal coal levy would not only impact our business with the United States, but it would impact thermal coal being shipped from Alberta as well." Mr. Campbell, a former Alberta environment minister, urged Ms. Clark to reconsider her party's position on what he calls an "egregious" levy. "It would be unfortunate to see these long-standing business relationships – which create jobs and economic opportunity to British Columbians, Albertans and Canadians at large – become a casualty of heated political rhetoric in the final legs of an election campaign," he said.
Ms. Clark wrote a letter to Prime Minister Justin Trudeau last week, asking him to impose a ban on thermal coal exports from B.C. ports. The commodity goes into coal-fired plants to generate electricity. On Tuesday, Ms. Clark threatened to go further if Ottawa doesn't comply.
Instead of relying on Ottawa to ban thermal coal exports from B.C. ports, the BC Liberal party devised its own strategy for the province to place a carbon levy of nearly $70 a tonne on thermal coal exports. With prices for the commodity languishing around $100 a tonne, the proposed levy would render such exports uneconomic and inflict deep financial losses on producers if they chose to continue shipping overseas to Asia, industry experts say.
Cameron Ahmad, press secretary to Mr. Trudeau, said in a statement on Tuesday: "I can only comment on the Premier's earlier request to the Prime Minister: We will always consider – carefully and seriously – any request from a Premier."
Most of the thermal coal exported last year from privately owned Westshore Terminals Investment Corp.'s facility south of Vancouver originated from U.S. mines in the Powder River basin in Wyoming and Montana. By contrast, federally owned Ridley Terminals Inc. on British Columbia's north coast handled thermal coal mined in Alberta.
Ms. Clark is not targeting metallurgical (or coking) coal, a key ingredient for making steel.
Ridley, located in the Port of Prince Rupert, handled 2.2 million tonnes of thermal coal last year, accounting for 55 per cent of the coal facility's total exports. Coal Valley Resources Inc., owned by Colorado-based Westmoreland Coal Co., runs a thermal coal mine in Alberta that sends shipments via Canadian National Railway Co. for export through Ridley.
A Ridley official declined comment about Tuesday's announcement by Ms. Clark. Westshore wrote its own letter last week to Mr. Trudeau, urging him to reject Ms. Clark's request for a ban.
"Should the federal government not implement a thermal coal ban, a re-elected BC Liberal government will develop regulations under the Greenhouse Gas Industrial Reporting and Control Act to ensure all thermal coal shipped to B.C. terminals is subject to a carbon price – approximately $70 per tonne," the BC Liberal Party said in a release. "That reflects the greenhouse gas emissions caused by the extraction, processing, transportation and combustion of thermal coal through a B.C. terminal."
Last year, Westshore had almost 6.6 million tonnes of thermal coal exported from its site, or one-quarter of the terminal's total volume. The bulk of shipments of thermal coal at Westshore originated from U.S. mines, said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based environmental think tank.
With Ms. Clark is describing the carbon levy as a way for Alberta to join B.C. to help battle climate change, Mr. Williams-Derry is forecasting prohibitively costly shipments if the BC Liberals win re-election.
"A fee of this magnitude would make it financial suicide for a coal company to export to Asia from B.C.," he said.
One of the U.S. customers at Westshore is Wyoming-based Cloud Peak Energy Logistics LLC, which uses Burlington Northern Santa Fe Corp.'s rail service to export through Westshore.
Coal export proposals in the United States have either been suspended by proponents, blocked by government officials or run into fierce opposition from environmentalists in the U.S. Pacific Northwest, notably in Washington state and Oregon.
The Trump administration, however, has pledged to breathe new life into the struggling American coal industry.
With a report from Gary Mason