In Canada pipeline feud, Alberta halts B.C. wine purchases

Canada's oil-rich province of Alberta struck back at neighboring British Columbia on Tuesday, halting purchases of that province's wines in retaliation for it potentially holding up expansion of a crude pipeline.

British Columbia proposed rules last week to temporarily block increased oil shipments through the Pacific Coast province, adding another hurdle to Kinder Morgan Canada's planned C$7.4 billion Trans Mountain pipeline expansion.

Alberta's New Democrat Premier Rachel Notley said the Alberta Gaming & Liquor Control Board will immediately stop importing B.C. wine.

"This is one good step to waking B.C. up that they can't attack our industry without a response," Notley said in a news conference.

The liquor control board is the distributor for all liquor retailers in the province.

Notley's move affects C$70 million ($56.01 million) in annual sales by B.C. wineries, a pittance compared with the value of the country's oil sector. But it illustrates the high stakes for Canada's energy industry if new pipelines are not built, and the fierce environmental opposition against them.

Canadian Prime Minister Justin Trudeau, who has approved the pipeline expansion, said last week that he would ensure the project gets built.

Experts disagree over whether British Columbia has authority to block inter-provincial transport, which is a federal jurisdiction, however the move by B.C.'s left-leaning New Democrat government adds another potential snag to a project that is already a year behind schedule.

Tight capacity moving crude by pipeline and railway from landlocked Alberta generated last month the biggest price discount on the province's heavy oil in more than four years compared to the West Texas Intermediate North American benchmark.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by James Dalgleish)