By establishing such a tight time frame Kinder Morgan has put enormous pressure on the federal and Alberta governments to act quickly in finding ways to force the B.C. government off its anti-pipeline position, at least in court.
The refusal of the government of British Columbia to recognize the legal approval process for the project means this test is about much more than a pipeline – it’s about the ability of the federal government to regulate the economy of Canada in the national interest.
Kinder Morgan’s setting of a timeline escalates the intergovernmental conflict, and could require the federal government to flex political muscle by sending in RCMP protection to ensure the pipeline is built, analysts at Desjardins Capital Markets said in a report on Monday.
Notley says the federal government has been looking at these steps but “this is obviously a matter that has to be accelerated …”
Canadian crude trades at a discount to the US oil benchmark, with tight pipeline and rail capacity sending the Western Canadian Select differential sharply wider than normal earlier this year.
“Given the stated opposition to the project and the stated intent to further regulate it, and appeal adverse decisions, the action British Columbia initiated a couple of months ago may very well not be the last thing we see”.
Environment Minister Catherine McKenna repeated the statement in French and officially that was it.
“Opposition continues to grow as people learn of the devastating effects this pipeline expansion would have”, Wilson said in a statement.
Prime Minister Justin Trudeau has said the project is in the national interest and will be built, while Alberta Premier Rachel Notley has said her province could cut off B.C. from Alberta oil supplies.
The move would influence gas prices in B.C.to soar. “Rest assured, your victory lap is temporary”.
Notley will head to Toronto later this week to meet with economists, investors, and federal officials.
A stalemate was always going to happen if the B.C. government was allowed to toss obstacles in the project’s way with impunity.
Conservative natural resources critic Shannon Stubbs said she was “flabbergasted” the cabinet meeting produced no plan.
“We need foreign businesses like Kinder to be saying we are an enviable place to do business in, not a place that I had to sell my asset to the government”, said Rafi Tahmazian, a portfolio manager at Canoe Financial.
The timing was no accident, said Chief Judy Wilson, secretary-treasurer of the Union of B.C. Indian Chiefs.
“I think it was a terrific exchange, actually, and I know that many of those CEOs walked out of there feeling as if the federal government understood the issues”.
The federal government has previously stepped in to assist aerospace workers in Quebec and protect auto industry jobs in Ontario, Notley said, and needs to do the same for Western Canada energy sector jobs. If it can’t, he said the impact on investment capital will be huge and crippling.
“Unfortunately, B.C. has now been asserting broad jurisdiction and reiterating its intention to use that jurisdiction to stop the project”, the company said.
The issue is a major political challenge for Trudeau, who approved the expansion plan in 2016.
Whatever levers the Prime Minister intends to pull, his confidence had best not be misplaced.
“Whenever there has been any attempt to delay unnecessarily, the government of Canada has intervened and successfully”, Carr said. “If she wants to invest in a pipeline, that’s her business”.
Although Horgan has threatened to pass regulations that could prevent additional oil from flowing through B.C. on its way to foreign buyers, he hasn’t done so nor has he asked the courts to rule on whether he has jurisdiction to that.
“Bad projects are bad projects, so if this redirects investment toward good projects that contribute to Indigenous reconciliation and meeting our climate commitments, then that’s a net benefit”, Stewart wrote in an email.