Tempest In An OilPatch

"My basic request is for Alberta and Canada to come to the table and sit down with British Columbia and work to figure out how we can resolve this.  If that's going to cause such a big problem that there are trade barriers, there is a very easy way to solve that - no pipeline."  B.C. Premier Christy Clark

"Royalties from Alberta citizens are off the table.  It doesn't mean we're not going to talk...  We're very happy to talk but we're not going to talk about Alberta royalties.  The premier of Alberta is not going to blink on royalties."  Alberta Premier Alison Redford

Is it a female thing?  Each setting out to prove she is capable of muscular disturbance of the family compact?  Talking tough.  Throwing their electoral weight around.  While the men sit back and goggle. 

Alberta's good fortune in the oil patch is in fact, Canada's good fortune in economic advantage to all the provinces.  Especially those provinces that garner equalization payments, and largely from Alberta.  Other than which there is also trickle-down in other provinces whose industries are advantaged by Alberta energy sources.

The Northern Gateway pipeline itself?  It doesn't truly await Premier Clark's approval.  This is federal territory.  The National Energy Board is in the process of hearings, after which it will pronounce whether or not to proceed, subject to cabinet input.  Of course the current Conservative-led federal government sources electoral support from British Columbia.

There's enough friendly blackmail to go around, here.  Premier Clark is playing to her own electorate, however, viewing an election on the near horizon.  Pushing aside the not-inconsiderable sum of nearly $7-billion her province is set to garner for the pipeline to the British Columbia coastline, any expense entailed in building it is not B.C.'s.

Nor would potential clean-up of spills be an economic disaster to the province.  Since the federal government calls for raising the limit on liability for damages to ensure that industry has in its kitty set aside sufficient funds "to fully cover a major response without requiring public money."  Industry must be prepared also to fund land-based spill management.

"...Those sectors [the oil and gas industry] must be responsible for all related mitigation and response costs."  Sounds fairly airtight.  So, not to worry.  The risks will all be supported by industry through federal legislation.

Premier Clark is adamant; no pay, no go.  "I'm only trying to get B.C.'s fair share.  If Alberta doesn't decide they want to sit down and engage, the project stops."  

Section 109 of the Constitution through the federal-provincial Natural Resources Transfer Agreements of 1930 grants the provinces jurisdiction over "Lands, Mines, Minerals, and Royalties", but it also permits provincial governments to make their own deals.

Premier Clark is prepared to deal, Premier Redford is not.  It's a classical tempest in an oilpatch.  Whose oil is it, anyway?

"To characterize this entire discussion as being about the royalties that flow to Alberta, I don't think is constructive and I don't think it's in the best interests of Canada.  It's not for Alberta to enhance British Columbia's economic benefit", complains Premier Redford.

So the $5.5-billion Enbridge Northern Gateway pipeline to carry oilsands crude from northern Alberta to the port of Kitimat  to enable shipment to Asia once environmental and fiscal considerations are dealt with has had a spanner tossed into the works.

Premier Clark isn't happy that Alberta, where that precious natural resource resides, will generate $81-billion in provincial and federal tax revenue over 30 years.  And British Columbia, the step-sister in the family, receiving a mere $6.7-billion (8.2%) for land-lease.

Tch!