Trade war rhetoric heats up as Alberta files objection to $1.4-billion North Montney Mainline
Alaska Highway News | February 15 2018
The Alberta government has filed its objection over TransCanada's $1.4-billion North Montney Mainline project, though both it and the B.C. government say the move has nothing to do with the current Trans Mountain dispute between the two provinces.
TransCanada is looking to build to the repurposed pipeline to bring B.C. gas to markets in the east, after originally planned to bring gas to the shuttered Pacific NorthWest LNG project on the west coast.
However, the move has prompted backlash and opposition from Alberta producers who say the project will flood an already glutted natural gas market and drive down their prices.
"Our filing has nothing to do with the recent dispute with the government of B.C.," Alberta's department of energy said in a statement released to the Canadian Press.
"The filing is consistent with Alberta's past positions relating to fair and just toll principles as well as consistent, well-established and accepted pipeline tolling principles."
The Alberta government says the tolls would give project proponents an unfair advantage, and could have consequences on it Crown royalties, future natural gas development, and timely access to markets, according to a report by the Daily Oil Bulletin.
B.C. Energy Minister Michelle Mungall told Global News it was common for governments to intervene in projects where tariffs are involved.
“There is going to be a tariff,” Mungall told Global.
“There was always going to be a tariff. And this has absolutely nothing to do with what is going on right now in terms of our desire to consult with British Columbians on what we do in the case of an oil spill.”
The opposition BC Liberals, however, say the move is no coincidence as trade tensions continue to simmer between the two provinces over the Trans Mountain pipeline expansion.
B.C. plans to review the impacts a diluted bitumen spill would have the environment, with an eye to restrict the flow of increased volumes of the product through the province. Alberta has already suspended electricity purchase talks with B.C., and imposed an import ban on B.C. wine in protest.
“While the Premier goes about grandstanding to his activist friends, British Columbian workers are suffering and our reputation as a safe place for investment is being tarnished,” BC Liberal leader Andrew Wilkinson said.
“Alberta’s actions are a direct consequence of John Horgan’s provocative approach – this is has to end, John Horgan has to go to Edmonton and sort this squabble out now.”
Peace River South MLA Mike Bernier said Alberta hasn't expressed opposition to the project until now.
"The trade war is expanding and the job losses are mounting. It is ridiculous that another project is being dragged into Horgan’s trade war," Bernier said.
TransCanada had planned to start construction of the project this year, subject to regulatory approvals. It would feed into its existing existing NOVA Gas Transmission Ltd. (NGTL) mainline, and give producers various options including deliveries to the oilsands, local distributors, Eastern Canada, the U.S. Midwest or to California/Pacific Northwest. TransCanada has also announced a $2.4 billion expansion of its NGTL System to deal with the increased supply.
The National Energy Board approved the pipeline in April 2015, attaching 45 conditions to the project. B.C.’s approval added another 21 conditions. The province granted the project an environmental certificate in January 2017, adding another 21 conditions.
Then-environment minister Mary Polak and then natural gas minister Rich Coleman said the pipeline would pump more than $800 million into the provincial economy, including $8 million in property taxes to the Peace River Regional District.
The NEB recently wrapped up hearings on the scaled-back project. Eleven gas producers have signed 20-year commitments to ship up to 1.5 billion cubic feet of gas per day on the mainline, including Progress Energy, which says the project is key to it developing its North Montney assets after the cancellation of Pacific NorthWest LNG in the summer of 2017.