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Little in pipeline expansions for B.C.

Barbara Yaffe, Vancouver Sun, April 20 2012

VANCOUVER — As yet another proposal emerges to carry ever-greater volumes of Alberta oil to the West Coast, British Columbians have every good reason to ask: What's in it for us?

Word surfaced last week that Kinder Morgan Energy Partners, a Houston-based pipeline company, hopes to nearly triple the capacity of its Trans Mountain pipeline, moving oilsands crude through B.C. to its Burnaby terminal on Burrard Inlet.

The project would see daily tanker export of oilsands product out of an area globally renowned for its natural beauty and lofty green aspirations.

Of course, environmentalists and aboriginal groups have long opposed Enbridge's Northern Gateway Pipeline, a separate plan envisioning a twinned pipeline that would snake from Edmonton to the northern B.C. port of Kitimat. Tankers then would move through narrow channels adjacent to the Great Bear Rainforest to reach open sea, and markets in Asia.

Gateway is in the process of going through federal regulatory review, with recommendations due in 2013.

The fact is, Alberta badly needs B.C. to be its new best friend because oil shipped to Asian markets would fetch a world price — higher than the North American price that companies in landlocked Alberta now fetch for the resource.

For example, the price difference this week is some $25 to $30 per barrel.

The challenge of getting B.C. onside in fact has been under discussion by Alberta's Progressive Conservative government since at least February.

That's when Energy Minister Ted Morton floated the notion his province might direct some cash into B.C. fisheries conservation or West Coast port and transportation infrastructure.

Of course, a provincial election is underway in Alberta. And while Premier Alison Redford's Progressive Conservatives have sought ways to bring other provinces onside with Alberta's oilsands agenda, Wildrose leader Danielle Smith — who could soon be her successor — already has suggested compensation for B.C. would be akin to paying ransom.

B.C.'s politicians, facing a 2013 election, aren't prepared to openly acknowledge any discussion, fearing a backlash to provincial support for the controversial Gateway project.

While B.C.'s reasons to demand compensation may seem perfectly legit, in fact the province could be in a tight spot.

Legally, says University of Alberta economics professor Bev Dahlby, B.C. cannot stop or tax the flow of oil across its land because that would constitute "a restraint on inter-provincial and international trade."

Nor does B.C. have legal authority to tax Alberta's government or claim a share of its oilsands royalties because, "the Crown — Alberta — is exempt from taxation."

C.D. Howe Institute policy analyst Ben Dachis notes the Alberta-B.C. pipeline dynamic could reflect a precedent for Canada.

Most of the experience regarding transport of energy resources across provincial boundaries has involved electricity transmission, not crude oil.

And when it comes to electricity, most power sales in Canada run north-south, with provinces selling hydro power to American states.

In any event electricity, travelling by way of transmission lines, does not spill due to pipeline leaks.

Whether B.C. should accept growing volumes of petroleum piped across its territory while Alberta reaps the real benefit is bound to become a bigger issue.

After learning last week of Kinder Morgan's Trans Mountain expansion plans, Vancouver Mayor Gregor Robertson vowed to "fiercely oppose" increasing the number of oil tankers in the harbour. "It's hard to imagine an oil spill on Kits Beach and Stanley Park."

Burnaby Mayor Derek Corrigan predicted the public response will be: "Not only is this a potential danger to us, but there's nothing in it for us."

Mighty hard to argue with those sentiments, especially when there's so little in it for B.C.

© Copyright (c) The Vancouver Sun


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