So there I sat last Thursday, at home, watching Calgary Snowpocalypse 2018 unfold all around me. Calgary received at last count about 35 to 50 cm of snow in 24 hours. In non-metric speak, that is about 12 to 18 inches. Part and parcel of that is a snow day, because driving in these conditions can at best be described as white knuckled terror. Of course as we all know, it’s not the driving so much as the drivers.
Anyway, there I sat, wondering if I should go to the well one last time on this whole BC government, Trans Mountain Pipeline, Alberta, Federal government fiasco. And, much as I would like to move on, I truly feel like I needed closure on this. So, hopefully for the last time (until the next time) on this…
On Tuesday last week, the Alberta government struck back at BC, banning the importation of BC wines into Alberta. This was easy because all liquor into the province comes in via the Alberta Gaming and Liquor Commission. Now, much hot air and humour has been made of this, since the wine industry trade is estimated to be only about $70 million versus the $1.5 billion number being tossed around about the oil potential being shunned by BC. But I think that misses the point. The import ban is purely symbolic. The wine industry is important to BC. And the BC government is proposing something which will deliberately hurt the Alberta and national economy so to get someone, anyone, to pay attention, any riposte needed to hit an industry with profile.
Let me be the first to say, Albertan’s like wine. And we like BC wine. A lot. What we don’t like is having landlocked resources and their potential export being constantly blocked and delayed and befuddled by a government intent on staying in power and thumbing their nose at the paramountcy of the Federal government and the rules of interprovincial trade and transport.
Another thing we don’t like is a federal government that seems content to issue platitudes and sit back and watch two provinces fight it out over something that is clearly federal responsibility.
So Rachel Notley upped the ante then called Horgan’s bluff. She served notice that Alberta can be as much a pain in the butt, juvenile, petty and sneaky as the BC government. And we will keep doing it until the Federal government, in the person of one Justin Trudeau, figures out he needs to step up and step in and end this POLITICAL battle once and for all. He can’t tell BC to stop doing what they are doing, but he can tell Canadians, Alberta, Kinder Morgan and the energy sector that it won’t work and he has their back – carry on with the build.
Meanwhile, the existing line keeps shipping oil and refined products into BC via the TransMountain Pipeline, in active service since 1953 (and ironically built as an export pipeline in the first place), and refining in Burnaby and shipping jet fuel to the Vancouver International Airport without disruption, servicing the fuel needs of the greater Lower Mainland and much of the interior.
Look, I get why having a big pipeline and export facility in the Burrard Inlet sticks in people’s craw, but you (BC) won’t let it go anywhere else. If Northern Gateway had gone ahead, this project may very well have been shelved for a decade or so. But it didn’t because the Fed changed those rules and this is what the end result is.
Don’t get mad at Alberta for trying to get the Federal government’s attention. This pipeline is in the national interest, has been approved and is needed. No matter where its terminus might be. You can’t eat your cake and have it too.
Phew! That felt good.
Stuart Parnell is a Managing Director at Stormont Energy Advisors, an independent advisory firm specializing in Sell-Side M&A, Corporate Finance and Transaction Advisory Services for North American energy service, diversified industrials, and energy technology companies. Read more Crude Observations from Stuart here.