Alberta's government may be considering a suspension of crude oil shipments to British Columbia in the latest episode of what is turning into a drama series starring Canada's biggest oil producer and its neighbor who wants to stop the extension of a crude oil pipeline to its coast.
In the provincial government's Speech from the Throne, Alberta's Lieutenant Governor Lois Mitchell said that all options for retaliation against B.C.'s opposition to the Trans Mountain expansion are on the table. Mitchell recalled a decision by a former Alberta PM in the early 1980s to reduce oil flows to refineries in eastern Canada by 15 percent in reaction to the federal government's National Energy Program that Alberta saw as a threat to its energy industry.
The suggestion is clear enough and it should not be unexpected. First, British Columbia's new government last year openly stated it did not want the Trans Mountain pipeline to be expanded and would use all available legal tools to fight it. The fact that the project was approved by the federal government was ignored.
Alberta insisted the expansion is crucial because Canada's pipeline network is already running at capacity; there is even a shortage rearing its head, and oil is having to be transported by train, which is both costlier and riskier. Related: Saudi Arabia Plans Its Own Shale Revolution
B.C. was equally insistent that it does not want more oil shipped to its coast and it does not want tankers docking at its ports, since the point of the expansion is to take Alberta crude to foreign markets.
In retaliation, Alberta announced a boycott on B.C. wine imports and on electricity imports. B.C. changed its mind about a proposal to change the rules for shipping oil through its territory that would have reduced oil flows for the duration of a study on oil leak response mechanisms. The study would have taken about a couple of years and many saw the proposal as a stalling tactic.
The federal government, meanwhile, has so far proved incapable of making the two provinces kiss and make up. At a recent meeting with the public, PM Justin Trudeau reiterated that Ottawa stood behind the Trans Mountain expansion, and that has been about it from the referee.
With such a history, it was only a matter of time for Alberta to strike back with something bigger than a wine boycott. However, Alberta PM Rachel Notley made a point of noting that the NDP government did not want to cause a crisis. "Our focus is getting people's attention on the matter."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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