Pipeline policy, power and Politics
The provincial government has announced a temporary moratorium on any additional oil tankers carrying certain petroleum products on B.C.’s south coast. The ban is not permanent and is part of a larger environmental and disaster review process. In his quotes on the review John Horgan has made it clear that these policies are an attempt to stop the construction of the Kinder Morgan pipeline repeatedly saying this is the representation of the “will of British Columbians”.
While there are currently some tankers coming in and out of the Burrard inlet, the NDP have posited that the construction of the Kinder Morgan pipeline would increase this traffic sevenfold. This number seems to be consistent across all reports. This is because the majority of the current supply is used locally in BC and Washington which leaves a rather small percentage to be transported overseas. By tripling the bitumen coming in and exporting nearly all the new fuel, tanker traffic would shift from an average of 5 tankers a month to an estimated 34. Traffic of this volume increases the likelihood of a spill at least proportionally if not more as these ships maneuver around each other and a busier waterway.
At present date the ban would only be on any additional tanker traffic. This does not explicitly prevent the pipeline from being built but building a pipeline without being able to ship product through it is not exactly a good business venture. The venture would also block any additional rail traffic. This is important as restricting pipeline transportation but allowing the increased transportation of rail (a more dangerous form of transportation) is effectively bad economic and environmental policy simultaneously. The ban will be put in place until an independent review panel can say that a spill off the coast of Vancouver would be effectively cleaned up. Speculatively, this seems to be intentionally unattainable criteria as the guideline is both vague in language and ambitious as a standard.
The policy will almost certainly be challenged in courts. The Constitution gives the Federal Government the responsibility of regulating trade and commerce as well as navigation and shipping. It is plausible that these constitution responsibilities grant the federal government the right to permit the construction of the pipeline and the export of oil sands through B.C., without requiring the consent of the provincial government. The provincial government does have the right to regulate all non-renewable resources and energy projects which, given the potential harm to wildlife and waterways, are at least grounds to be heard in court.
While the ban may not hold up, court hearings take time, more time spent in uncertainty undermines the confidence investors may have in an already risky pipeline venture. Environmental regulations continue to be ramped up both locally and globally, which makes return on investment less and less certain. More than an outright ban from the NDP it is a signaling that they are going to do everything within their power to block the pipeline, and that signaling alone may be enough to dissuade Kinder Morgan from the estimated $7.4 billion required to build their pipeline.
Trudeau and Alberta leader Rachel Notley have stated assuredly and repeatedly that the pipeline will be built as a signaling to investors that this is in fact a viable project. It seems very unlikely that either Alberta or Canada will have a government that opposes the project anytime soon. With Horgan’s grasp on provincial leadership being at such a slim margin such strong anti-pipeline signaling may not have the policy weight it requires should this legislation fail to hold up in court.
While the federal government has final verdict on matters of national interest, a category Trudeau asserts that the pipeline falls under, there is also the matter of a brewing trade embargo between provinces which the Prime Minister will now need to navigate. While the banning of B.C. wine in Alberta has become somewhat of a joke recently the economic impacts of refusing trade between the two Provinces could have an extremely negative impact on the nation as a whole. Already Alberta has stated that it will not buy B.C. hydroelectric power without the pipeline, this would further degrade our already small chances of achieving our climate targets. Additionally in 2014 B.C. sent $13 billion worth of goods to Alberta and received over $15 billion in return. Without this trade relationship both provinces stand to lose substantial gainful employment and economic activity. It is unlikely to go this far but the economic retaliations of Alberta towards B.C. are the signs of divergent interests that will need to be managed carefully to avoid additional, mutually detrimental, behavior.