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B.C.’s Chances To Win Against Trans Mountain Uncertain

Transmountain Pipeline

British Columbia’s chances of getting the upper hand over Alberta and the federal government with regard to the Trans Mountain pipeline expansion are uncertain, according to lawyers and other legal professionals interviewed by the Canadian Press.

One expert, the chair of natural resources law at the University of Calgary, Nigel Bankes, said that British Columbia’s Court of Appeals will likely reject the provincial government’s proposed legislation on the transportation of heavy oil through its territory because "All rhetoric, all the public announcements, all the announcements from the premier and the relevant ministers make it clear that this legislation is actually directed at Trans Mountain," and Trans Mountain is a federally approved project.

A U.S. law professor, Bruce Ryder, disagrees, however, saying that the B.C. draft legislation targets all heavy oil shipments across B.C. territory, and there is support for it in past decisions by the provincial Supreme Court. On the other hand, Ryder sees problems with the proposed permitting regime for heavy oil shipments in British Columbia.

The procedure of issuing these permits—which clearly aims to cancel the Trans Mountain expansion—could be interpreted as an attempt by B.C. to block federal projects, and this, Ryder told the Canadian Press, would be unconstitutional.

A third expert, the vice dean of the University of Ottawa law faculty, Carissima Mathen, is straightforward: in her opinion: the B.C. proposal is clearly in conflict with federal law.

"I haven't seen any argument as to why the federal government doesn't have authority to regulate this interprovincial pipeline the way they have authority over all kinds of other interprovincial undertakings," Mathen said, adding that the legislation might work if it only adds new conditions to the existing terms for shipping heavy oil across B.C.

However, if Ottawa strikes back by approving new legislation that reinforces its jurisdiction over interprovincial projects, it would undermine B.C.’s jurisdiction over the matter.

Related: China’s Oil Futures Are Gaining Momentum

Last week, the B.C. government asked the provincial Court of Appeal if the province has the right to require the companies willing to carry heavy oil through B.C. to get permits from the province.

“We have asked the courts to confirm B.C.’s powers within our jurisdiction to defend B.C.’s interests, so that there is clarity for today and for the generations to come,” Premier John Horgan said in a statement after the province submitted a reference question to the B.C. Court of Appeal—the highest court to which the province can send a reference question.

Meanwhile, Kinder Morgan has given Ottawa an ultimatum: make sure the project can go through or we are dropping it. Alberta seems ready to step in and buy the US$5.9-billion expansion project.

By Irina Slav for Oilprice.com

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