Senior staff from B.C. and Alberta don’t quite have the hard part of any pipeline deal — the money part — nailed down yet.
But they presented some progress this week on knitting the two provinces closer together when it comes to moving energy around Western Canada.
Premiers Christy Clark and Alison Redford formed a working group of deputy ministers last year to find ways out of the jam that had developed over the provinces’ different stances over heavy oil pipelines from Alberta to the coast.
Alberta desperately needs them. B.C. has five conditions before it would consider approving one or more. And the big one is a fair share of the new revenue.
The two premiers were estranged off and on over the issue before agreeing to a vague framework last year.
The deputies posted an update on their work this week. The message is that there are huge gains to be made on both sides of the Rockies, if the provinces can get their acts together.
“Right now, Canada is losing out on more than $50 million per day in potential oil revenues,” the report says, citing a Canadian Chamber of Commerce study.
The two provincial teams agree that B.C.’s conditions are required to give projects the “social licence” to proceed.
“For British Columbians and Albertans to accept the degree of development that is needed, all parties, including the federal government and industry, must recognize the risks and benefits of the oil and gas sector.”
Engaging the public on pipelines means countering misinformation on numerous fronts and overcoming the negative history (especially with First Nations) that lessens confidence in such projects, they say.
There’s a lengthy list of things that need doing on spill response. Of note is the idea that Alberta will be brought into the ongoing dialogue on marine-spill responses. Pipeline spills on land are a common problem for each province. But the prospect of a marine spill has been largely a B.C. or federal issue. Now, B.C. and Alberta will jointly review the tanker-safety panel report.
The provinces have different outlooks on dealing with First Nations, because Alberta bands have treaties and B.C. bands don’t. But they’re going to adopt a similar approach in their expectations from industry as to benefits for First Nations.
Also in the works is a detailed analysis of the huge amount of new transportation infrastructure needed in both provinces. There’s also talk of a new governance mechanism for a fully integrated transportation trade network. Not just for oil flowing west, but for goods rolling east from B.C. ports to Alberta industries.
The deputies tread more cautiously into the subject of “fiscal and economic benefits.” While the big potential benefits extend to all of Canada, “it is also true that B.C. faces risk not present in Alberta.”
“With respect to oil exports, B.C. and Alberta recognize each other’s ownership of their natural resources that are being sold, used or risked in major projects.”
And both provinces agree on a “risk-adjusted principle”: Significant environmental costs or risks should not be assumed without appropriate benefits for B.C. and Alberta.
The report says the risks stay constant through the life of a project such as a pipeline, but the financial benefits are heavily weighted toward taxation that occurs into the future.
“Public support is higher when benefits are realized sooner.”
Still to come is identifying exactly what’s in it for B.C.
Just So You Know: The update also says B.C. will be take an “active role in the Zalinski recovery.”
That’s the oil-laden U.S. military transport ship that sank in the Inside Passage in 1946. A major recovery operation was undertaken by the federal government late last year to recover some of the oil. B.C. has agreed to be involved in any further salvage work because the recovery “represents a unique opportunity for shared learning with coast guard in a controlled marine-spill scenario.”
