Pipeline politics will play out at the pump

Don’t look now, but the cost to fill up your car at the pump may eventually be tied to next year’s provincial election in Alberta.

That’s because Alberta Premier Rachel Notley has doubled down and has matched her chief political rival in the jingoistic sweepstakes over the Kinder Morgan pipeline expansion.

United Conservative leader Jason Kenney has been saying for months that if elected premier (a very real possibility) his government would reduce, or even completely ban, oil shipments to British Columbia if the B.C. government were to attempt to halt the pipeline project.

Last week, in a move that seemed to stun the B.C. NDP government, Notley’s government made the same promise in its throne speech. That speech was unusually stinging in its characterization of the B.C. government’s position on the pipeline project and warned in no uncertain terms that the Alberta government is prepared to get rough.

The speech proudly mentioned that the Alberta government won the “wine war” with B.C. and several times referred to B.C. acting “illegally” when it came to the pipeline.

Notley says her government is preparing legislation, to be tabled fairly soon, that will lay out a plan to reduce oil shipments from the province.  That throne speech evoked memories of former Alberta Premier Peter Lougheed, who limited oil shipments to the East in response to the federal government’s National Energy Program. Lougheed won that battle (as have two other Alberta premiers over the years), and the federal government eventually backed off from trying to grab much of Alberta’s oil and gas revenues. Clearly, both Notley and Kenney think they can win a similar fight with B.C.

The throne speech, after mentioning Lougheed’s legislation, offered this threat:  “We will not hesitate to invoke similar legislation if it becomes necessary owing to extreme and illegal actions on the part of the B.C. government to stop the pipeline.”

It is not entirely clear whether Alberta is on firm legal ground. Section 92(A) of the Constitution clearly gives provinces the right to control the export of their non-renewable resources such as oil and gas, but it also stipulates that any such action “may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.”

However, any move by Alberta to restrict oil shipments could quickly wreak economic havoc in B.C. while the courts sort out the jurisdictional arguments.

Drivers in Metro Vancouver recently got a taste of what a decrease of oil supplies can do to the price at the pump. Prices jumped to around $1.50 a litre after the Parkland (formerly Chevron) refinery in Burnaby shut down for a few weeks for maintenance.

About 60 to 70 per cent of all petroleum products used in Metro Vancouver are delivered through the existing Trans-Mountain pipeline, which originates near Edmonton.

Energy analysts think the price at the pump could easily jump to a mind-boggling $3 a litre in a fairly short period if Alberta deploys its nuclear option. And prices could increase quite quickly and dramatically if any prolonged supply problem takes hold.

Now, the threats coming from Notley and Kenney are, for now, just that: threats. The B.C. government hasn’t actually done anything concrete – yet – to block the project, other than preparing a reference court case on whether it has the power to in some way regulate what flows through the pipeline.

That is one of the arguments offered by Environment Minister George Heyman in response to Notley’s threat. That, and that he doesn’t think she will actually take any action.

I think Notley is content to let the threat linger for a while before actually carrying through on it. But as that election draws closer, Notley will need to be seen as fighting for Alberta’s interests.

There’s no question that limiting oil shipments would play extremely well with the Alberta electorate, and British Columbians would suddenly become very familiar with the implications of an oil shortage.

And if gas prices skyrocket because Alberta turns off the tap, you can be sure the debate over the Kinder Morgan project will shift from tanker traffic and pipeline spills to an old-fashioned consumer argument about what it costs to fill up the car.

Keith Baldrey is chief political reporter for Global B.C.