BY BILL PHILLIPS
The amount of oil and gas being shipped from Alberta to B.C. was being reduced even before the Prairie province proclaimed Bill 12 today, says Premier John Horgan.
Alberta Premier Jason Kenney and his newly-elected government, proclaimed the bill, introduced by former Premier Rachel Notley, to curtail oil and gas shipments to the province as punishment for B.C.’s opposition to the twinning of the TransMountain pipeline.
Kenney suggested that the twinned pipeline would result in more capacity to ship refined gas to the Lower Mainland and, thus, reduce the record-breaking high prices at the pumps in the Lower Mainland. Horgan, meeting with provincial media this morning, pointed out that was never part of the original TransMountain plan.
“The original TMX proposal did not contemplate increasing refined product in any way,” Horgan said. “In fact, quite the opposite.”
He said that according documents submitted to the National Energy Board about 55,000 barrels of refined oil per day are being shipped right now and the capacity at the Parkland refinery is about 60,000 barrels per day.
He added that over the past couple of years the amount of refined oil coming from Alberta, which goes to local refineries and then to gas stations in the province, has been decreasing while the amount of heavy diluted bitumen, headed overseas, has been increasing. And that is what is now putting the squeeze on gas prices in the Lower Mainland.
“If you look at the data from 2017, the amount of the refined product coming through the existing pipe was 37 per cent (for British Columbia consumption), 54 per cent of that heavy oil was going to Washington State and nine per cent was exported,” he said. “Last year, the numbers of export oil jumped from nine per cent to 21 per cent, knocking down refined product (for B.C.) from 37 per cent to 27 per cent. There is less refined product coming into the Lower Mainland now with the existing pipeline and no commitment from TMX to do something about that with the twinning of the pipeline.”
The existing pipeline, is now owned by the federal government, and Horgan wants to explain the issue to Prime Minister Justin Trudeau and says the federal government, by allowing more refined oil through existing pipeline, could almost immediate reduce the price at the pumps in the Lower Mainland.
“I want to talk to him about what the new owners of that pipeline can do about relieving pressure here in the Lower Mainland,” he said. “The owner of the pipeline certainly could direct that light oil, that could be refined at Parkland, or a refined product, could replace the diluted bitumen that is thwarting our efforts to get more gas into the Lower Mainland. I’m hopeful that the federal government, if they see this as a project in the national interest, will also see a national interest in making rational pricing the Lower Mainland when it comes to gas in the Lower Mainland.”
He said it’s “undeniable” that less refined product is coming through the pipeline and more bitumen is, which is driving gas prices up.
As for Alberta’s Bill 12, Horgan said B.C. has filed two court actions against the bill and will argue the bill is unconstitutional.
Horgan said he talked with Kenney this morning and the conversation was respectful and cordial. Horgan said Kenney indicated to him, and at subsequent press conference, that he has no immediate plans to use the bill but felt it was a key campaign commitment.
“During the call, I made it clear that my job, as is his, is to protect the interests of the province I represent,” Horgan said.
Horgan also said that British Columbia is not blocking permits for the pipeline. Of the 1,182 permits required for the TransMountain pipeline, British Columbia has issued 309 and, Horgan said, the province will continue to issue permits as the applications come forward.
“At no time, over the past two years, have we disrupted or delayed the permitting process in any way beyond those required to protect the interests of British Columbia,” he said. “From the beginning, we have been using existing court actions to protect the interests of British Columbia.”
The province has started a reference case, similar to Ontario and Saskatchewan, to determine jurisdiction.
He dismissed the notion that it is hypocritical for British Columbia to try and control oil shipments through B.C. and oppose Alberta from trying to do the same thing.
“What we’re in court doing is asserting our right to regulate products that move within British Columbia, not just by pipeline, but by rail and other mechanisms,” he said. “I believe that’s in the interest of our marine environment, our natural environment … With respect to the action by the Alberta government, it is to impair trade between two jurisdictions. It’s a trade question in the case of Alberta and British Columbia. It’s a jurisdictional environmental protection in our case.”