Don’t turn off the oil taps just yet, Rachel, escalating dispute with Horgan likely to make things worse

Alberta Premier Rachel Notley addressing cabinet on Monday

Kinder Morgan says the fight between governments influenced it to suspend Trans Mountain Expansion. Will more fighting fix the problem?

You can hear the cheers from across the Rockies. Most Albertans are siding with Premier Rachel Notley’s announcement that her government will soon pass the necessary legislation to restrict oil shipments to British Columbia refineries in retaliation for Premier John Horgan’s harassment of the Trans Mountain Expansion, which in turn drove Kinder Morgan to suspend the project Sunday. Notley is making a mistake.

Maybe not a mistake for her domestic politics. By all accounts her brief ban of BC wines from Alberta liquor stores was very popular on the home front.

As is her bellicose language.

But is it good strategy? Will it help get what Alberta needs – the completion of the 525,000 b/d pipeline that will carry diluted bitumen from the Edmonton area to Burnaby, BC, where it will be shipped by tanker to Asia or West Coast US markets?

The big gun has already been fired in this war.

If Kinder Morgan hoped to get Prime Minister Justin Trudeau’s undivided attention, suspending the $8 billion project until May 31 and leaving only a faint hope it will be revived certainly did the trick.

Jim Carr, natural resources minister, scurried off to Parliament Hill Sunday to meet with reporters outside on a brisk spring day, a show of his – and the government’s – resolve, perhaps.

“Our government stands behind this project and has the jurisdiction in this matter. Under Canadian constitutional law, this is well-established and clear and has been reaffirmed by multiple courts, including the Supreme Court of Canada,” he later said in a press release.

“We are determined to find a solution. With all our partners, we continue to consider all available options. As our Prime Minister has said, this pipeline will be built.”

A solution. What everyone wants.

But Carr said something else interesting: “The Government of Canada calls on Premier Horgan and the BC government to end all threats of delay to the Trans Mountain Expansion. His government’s actions stand to harm the entire Canadian economy.”

Actions? What actions?

Horgan has done exactly one thing and it failed.

BC sought leave from the Federal Court of Appeal to dispute the National Energy Board’s Dec. ruling that the City of Burnaby dragged its feet processing tree cutting permits, therefore the regulator granted them to Kinder Morgan instead.

The court dismissed the appeal.

By refusing to hear the case, the court is not required to explain its decision. And Burnaby’s bid to the Supreme Court of Canada will fail according to my experts.

Fair to say that legal stratagem laid an egg.

Next, Horgan proposed consulting British Columbians about five oil spill response regulations, including the infamous “Point 5” that would restrict the flow of dilbit in BC until a science advisory committee determined – probably years down the road – if scientists know enough about how dilbit behaves in a marine environment (they do, say the four scientists I interviewed) to design a first class response plan.

That sparked Notley’s wine ban. A few weeks later Horgan said he would send Point 5 to the Federal Court of Appeal as a “reference case.” Notley immediately revoked the ban, ending the “whine war.”

Then a month ago Horgan hired hot shot Vancouver  Joseph J. Arvay, QC to draft that reference case.

Arvay must be a slow writer because no application has been submitted to the court, as far as Energi News is aware.

That’s it. The sum total of Horgan’s dastardly actions Carr claims could harm the national economy: a court challenge that never got off the ground and a lawyer who is apparently billing very handsomely by the hour.

What’s really been going on in recent months is almost entirely inter-governmental trash talking.

Kinder Morgan Canada had a few things to say about the effect of government conflict on its decision to suspend the project: “A company cannot resolve differences between governments.  While we have succeeded in all legal challenges to date, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments,” said CEO Steve Kean.

Kean went on to say that the company committed to prudently spend investor money and “we have determined that in the current environment, we will not put KML shareholders at risk on the remaining project spend.”

The current environment? As in, the highly charged political environment in which BC and Alberta premiers are slinging mud at each other in the media and one is ready to turn off the oil taps?

That environment? Which appears to benefiting the agenda of only one of the brawlers, the BC government?

I have said from the very beginning of this dispute between Notley and Horgan that the Alberta premier’s better strategy is to keep the pressure on Trudeau, whose only option has always been to pull out the constitutional hammer and use his majority in the House of Commons to pass legislation enabling the Canadian government to direct the normally arms length NEB to issue all provincial and municipal permits and approvals needed for Trans Mountain Expansion.

Notley’s escalation of the political conflict has arguably helped bring us to the current crisis, where the pipeline project is imperiled.

Will more of the same improve matters? The Alberta Premier may want to ponder that question before she directs her lawyers to draft the “turn off the taps” bill.

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