UNTIL RECENTLY, BRITISH COLUMBIA PREMIER CHRISTY Clark and her Alberta counterpart, Alison Redford, were baring their teeth at one another over building oil pipelines through B.C., such as the proposed Enbridge Inc. pipeline in the north and the Kinder Morgan Canada Terminals Ltd. twinning project across the south. Those lines would boost markets for Alberta’s oil, now struggling with supply, price and demand issues in the U.S., currently Alberta’s biggest market.
The snarling began over a year ago, when Clark, in preparation for last spring’s provincial election, laid down five key conditions before Alberta would receive B.C.’s blessing on pipelines. Most of the conditions were common sense, such as protecting the environment, but No. 5 was a whopper: B.C. must receive its “fair share” of a pipeline’s economic benefits in return for taking added environmental risks. Although “fair share” wasn’t defined, it was stressed that the benefits must exceed the usual construction/permanent jobs, fees, etc., that such projects traditionally attract.
While many outside B.C. expressed indignation over the “nerve” of Clark actually seeking more, most British Columbians quietly supported her. Standing up to Alberta et al certainly contributed to Clark’s upset win over the favoured New Democratic Party in last spring’s B.C. election.
And the impact of Clark’s stand is expected to carry over into this new year. For example, her stand should remind Ottawa and the oil companies that pipelines can no longer be rammed down taxpayer throats from this point forward. And that increased financial/economic compensation for those affected by a pipeline’s route now is on the table, along with environmental considerations.
Fortunately, cooler heads prevailed. In November, Clark and Redford reached agreement on B.C.’s five conditions. On the stumbling-block fifth one, the agreed upon solution is for B.C. to seek compensation from the Alberta oil companies in 2014 and beyond, not from Alberta government taxes and royalties. It remains unclear, however, how receptive the oil companies will be.
But, while there are still major concerns over new pipelines running through B.C. and spills from increased coastal oil tanker traffic, public opinion in B.C. is shifting. British Columbians are beginning to connect the dots between exporting oil to Asia and jobs at home.
The deal may also boost the chances of another initiative, this one a local idea to reduce environmental risks and boost B.C. jobs: Victoria-based weekly newspaper baron David Black has proposed a $13-billion refinery at Kitimat to process the Enbridge pipeline’s crude. Such a refinery would mean that less environmentally risky refined oil would be shipped in B.C. tidewaters.
More important, given events such as the tragedy last summer in Lac-Mégantic, Que., where an oil-laden rail tanker crash killed 47, many West Coasters now realize that if pipelines, which are safer than rail, are not built, then the oil is likely to move across B.C. via rail. That’s why opinion polls now show increasing public support for pipelines.
Not surprisingly, this realization is also why B.C. and Alberta politicians now seem less inclined to bicker and more interested in the unexpected – co-operation.
© 2014 Investment Executive. All rights reserved.
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