Why B.C., Alberta are ending their pipeline standoff
New thaw seen in getting Alberta's oil sands bitumen to West Coast
Last week saw a remarkable shift in the pipeline standoff between B.C. and Alberta over the contentious problem of getting Alberta's oil to B.C. ports, for shipment to Asia.
Until recently, government officials on both sides of the Rockies had described this particular interprovincial relationship as "frosty." With neither side even willing to seriously discuss it.
But now, with B.C.'s spring election fading in the rear-view mirror, it appears the Liberal government's hard line over transporting Alberta's oil is starting to defrost — rapidly.
Rhetoric is being replaced by actual negotiations and if the talks continue as they appear to be going, the end result will almost certainly be bitumen from Alberta's oil sands making its way to West Coast ports, assuming of course that other regulatory hurdles can be surmounted.
Much to the chagrin of environmental groups and other pipeline critics, the question no longer appears to be if Alberta's bitumen will make its way through B.C. but rather when it will happen and how it will be transported.
B.C. Premier Christy Clark and Alberta's Alison Redford met in person in Kelowna back in July to set the stage for this relationship warm-up.
The get-together was political reset after nearly a year of acrimony because of (election-bound) B.C.'s unwillingness to get behind pipeline projects like Enbridge's Northern Gateway, and because of Alberta's unwillingness to move on Clark's demands for a greater share of the benefits from these projects.
At one point, Redford accused Clark of "dividing Canada" with her demands for a larger share of the pie.
But that was then, this is now. The two leaders have suddenly agreed to form a working group of senior bureaucrats to hammer out their differences and, as Clark and several of her ministers put it, to find a way to "get to yes."
What's changed?
If you don't believe that's the direction they're headed you need only read through the terms of reference released last week for the working group doing the negotiations.
The document states two simple goals, clearly spelled out in black and white: One is opening up new markets and expanding export opportunities for oil and gas; the other is developing the oil and gas sector in both provinces.
The reality is that you can't accomplish either of those goals without finding a way to get the product to market.
And to drive that point home, the transportation section spells out the idea of using rail as an alternative for moving oil if pipeline projects don't get approved.
It's all a far cry from the transportation stalemate that was in place for most of the past year when Clark's Liberals were playing the environmental card and saying B.C. was the one assuming all the oil spill risks in this relationship.
So what's changed?
Probably the biggest difference is Christy Clark is no longer fighting an election campaign. In B.C., the official campaign period lasts 28 days, but the reality was that Clark and her Liberal government had been in campaign mode for more than two years.
Every initiative, every political position, every answer was being viewed through a campaign lens.
As such, there was no way she could appear pipeline friendly and still hope to win an election in a province with such vocal opposition to pipelines. Particularly the proposed Northern Gateway project given the heightened sensitivity around the oil sands as well as Enbridge's recent history of pipeline spills.
But it is not just B.C. that has changed. Alberta also appears to have realized it needs to make the relationship work if it is to efficiently get its oil to market, and Redford has been talking a tougher game of late about more stringent environmental regulations to meet at least some of her critics.
The proposed Keystone XL pipeline from Alberta to the Gulf of Mexico remains stalled, with no approval as of yet from the U.S. government. And though there has been talk of Alberta piping its oil east, through a reversal of the main TransCanada pipeline, that plan would come with a huge price tag, including the added time and cost of shipping Alberta oil from Eastern Canada down through the Panama Canal and then across the Pacific.
Tensions running high
None of this is to suggest pipeline construction can begin tomorrow. There are still roadblocks ahead for both provinces. Environmental concerns, First Nations challenges, not to mention that pesky B.C. demand of a "fair share of the benefits" that make up Clark's five conditions for approving heavy oil pipelines, all need to be dealt with.
But what we seem to be seeing now is a desire by both B.C. and Alberta to sit down and come up with a plan for getting past those hurdles.
Speaking to CBC Radio recently, B.C. Environment Minister Mary Polak was very candid about this. The environment ministry is "not the ministry of No," she said. "We believe the five conditions can be met."
Of course, being willing to talk about an issue and actually getting somewhere with it can be two very different things.
Despite assertions by federal ministers, B.C. voters still appear to be largely opposed to a big increase in the movement of oil across the province and along coastal waterways.
In what might be a sign of things to come, protesters from Greenpeace and First Nations groups effectively shut down the Kinder Morgan terminal in Burnaby last week.
This is the facility that would see a threefold increase in oil shipments if yet another pipeline project, the proposed Trans Mountain expansion, is approved.
Tensions are already running high, and a report earlier this month about the sorry state of marine oil spill response along the B.C. coast set the stage for even more oil-related angst.
At the moment, the B.C.–Alberta relationship over pipelines and oil is definitely warming. But once reality starts to intrude it may not take all that much in the way of public pushback to put it back in the deep freeze.
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