Oil, water and wine: Escalating Alberta-B.C. feud threatens future of Trans Mountain pipeline

A clash betweenBritish Columbia and Alberta over the Trans Mountain pipeline expansion was probably inevitable,but the surprisinglyemotional nature of the conflict and its recent escalation makes a compromise less likely.

In the week or sosince B.C. proposed newrestrictions on bitumen shipments that would flow through the expanded pipeline from Alberta to the West Coast, therehave been threatsof lawsuits and economic retaliation and on Tuesday,a move by Alberta to block imports of B.C. wine.

I'm not sure what's happened to the great Canadian reasonableness. That seems to have disappeared.-

A feud between provincial politicians is one thing, but the Trans Mountain conflict is generating worry and anger among residents of both provinces, making aneasy or obvious public detente all but impossible.

Even ardentoilpatchsupporters admit this doesn't bode well for the future of the project.

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"One can't assume that they'll continue with this ad infinitum," said DavidYager, an energy policy analyst and small "c" conservative activist in Calgary.

Even before B.C.'s environment minister said the province would look for ways to impose regulations to prevent expansion of bitumenshipments, Trans Mountain's developer, Kinder Morgan, had announced the project's start-up date was being delayed to December 2020 because of ongoing difficulty in obtaining permits.

"They have opportunities in other markets, like all the other companies do,"Yagersaid.

"I'm sure they've got it worked out how long they're going to continue to do this before they say, 'We're not doing this any longer;we've got other things to do.'

"Hopefully, they won't do that. I can't speak for the company.But the trend is, among companies like that, there is a statute of limitations on how long they're going to put up with this."

Strip away the political noise, supporters of the $7.4 billion Trans Mountain expansion say, and what you'll find is a sound business case that could hold upin the face of politicalopposition.

Canadian oil sells at a discount because of limited shipping capacity. The Trans Mountain expansion, which wouldnearly triple the capacity of the current pipeline system, would not only ease the bottleneck but help Canada's efforts to grow in Asian markets.

KinderMorgan has made a believer of the market as well. The pipeline expansion has gotten strong backing from lenders,to the tune of$5.5 billion last year.

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Proponents say the project also promises jobs and government revenues. Prime Minister Justin Trudeau has defended it as being in the best interestof Canada.

"This is something where we have to all band together and get this project done because it's in the national interest," Alberta Energy MinisterMargMcCuaig-Boydsaid this week at a renewable energy conference in Calgary.

But for many opponents of the projectincluding some members of the B.C. governmentthere's no compelling economic case to be made, at least not one that outweighs the environmental cost.

The climate change agenda is really important in people's overall understanding of this.- James Lawson, University of Victoria

For them, the threat the projectposes to the environment whether throughleaks,spills or impact on climate change is not something that can be answered with a promise of jobs or money.

Such polarization makes collaboration hard to accomplish.

"We only have to look further south from us here, where you see people that are way on the right and on the left, and the people in the middle get burned," said Bob Schulz, a professor with theHaskayneSchool of Business at theUniversity of Calgary.

"That's almost where we're going now on this issue."

Schulz said he expects discussions between B.C. and Alberta will get still more complicated.

"I'm not sure what's happened to the great Canadian reasonableness. That seems to have disappeared."

But B.C. politics has always been complicated, and it didn't get any simpler after theNDPtook power with the help of the B.C. Green Party last year.

Indeed, it was only a couple of weeks ago that B.C. Green Party Leader Andrew Weaver warned on Twitter that theNDPwould lose its ability to govern if it continued to pursue the development of the province's liquefied natural gas industry.

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But after Victoria's move to blockany increase in diluted bitumen shipments while a scientific panel looks at options for cleaning up a future spill, "[Premier] John Horgan and Andrew Weaver can have better conversations for the next few weeks," said James Lawson, who teaches natural resource and environmental politics at the University of Victoria.

He said the people opposed to the project don't see Victoria's move as posturing. Rather, said Lawson, NDPand Green supporters in coastal urban areas have reacted angrilyto Trudeau's pronouncement that the expansion would go ahead, and to Alberta Premier Rachel Notley accusing B.C. of "political game-playing."

Impact of Alberta and B.C.'s trade war

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The impact of Alberta and B.C.'s trade war is starting to extend past the two provinces, as the federal government gets involved and people in other provinces begin to pick sides. B.C. Premier John Horgan spoke publicly on Alberta's ban on B.C. wines saying, "I'm not responding in any way other than saying I'll defend our wine industry. I'm here for B.C., not for Alberta"

Notley also drew ire with last week's suspension ofelectricity-purchase talks with B.C. and yesterday's retaliatory wine boycott, which B.C. Premier John Horgan described as a "threatening position."

The response might be more nuanced in the B.C. Interior, where local economies are more resource-based. But pipeline issues still resonate because offears of diluted bitumen spilling into water systems or on land, said Lawson.

"And it's hard to understate the extent to which here in the coast, and particularly in the urban areas, the climate change agenda is really important in people's overall understanding of this," he said.

Entrenched positions and amplified emotions on both sides point to a prolonged battle.

Lori Williams, a political scientist at Calgary's Mount Royal University,said the NDPgovernments in B.C. and Alberta soon will be facing elections, putting pressure on them to be seen to be standing up for provincial interests.

But she said shebelieves there's room for a co-operative solution and that science-backedassurances or federal pledges of help with environmental safeguards might offer an opening.

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"When people calm down a little bit, there may be a little bit more openness to some compromise," she said.

"There will probably have to be concessions on both sides. But the arena of public attention doesn't lend itself to subtlety and nuance and compromise and so forth. So whatever moves get made in a different direction will have to happen out of the public eye."

In the meantime, the Alberta-B.C. feud continues, with another multibillion-dollar energy project hanging in the balance.