British Columbia said last week that it would place restrictions on the quantity of diluted bitumen that can be transported through the province until it has assessed the evidence on the impact of a spill. The move, which could block the proposed expansion of Kinder Morgan’s Trans Mountain pipeline, has infuriated neighbouring Alberta, which is desperate to get the landlocked province’s oil products to tidewater.
Alberta has retaliated. The most recent action was Premier Rachel Notley’s announcement the province will block imports of BC wine, which sparked a swift social media reaction. But Notley also signalled another course of action: suspension of talks over an electricity deal worth some $500 million annually.
The provinces have been in discussions for two years over such an accord, but talks have been choppy for months over the quid pro quo that Alberta has been demanding: in return for electricity purchases and a potential upgrade to transmission lines, the province wants access to BC waters.
Alberta has committed to phasing out its coal-fired power plants to achieve its climate targets, but Alberta has little hydroelectricity capacity and so it is working to expand its wind-powered generation. The challenge here is that wind is intermittent and must depend, for example, on natural gas plants as backup. This is a gain for the climate over coal, but natural gas remains a greenhouse gas that at some point must be phased out.
The use of BC hydroelectricity, which unlike wind is always available, would have reduced the province’s dependence on natural gas.
According to energy systems analysts, supported by the Pacific Institute for Climate Solutions, if Alberta does not use the clean hydroelectricity from BC, it may need to build out more natural gas generation and then have an increasingly difficult time meeting its climate goals. In this type of scenario, more land will be transformed from agricultural use to energy use as wind power takes up a lot of space, and electricity costs could increase in the long term.
Another alternative is to build a transmission line to the US. Washington approved the Keystone XL pipeline last March, which would take Albertan oil through to the US Gulf Coast.
It remains to be seen how this political brawl will unfold. BC Environment Minister George Heyman has said government will establish a scientific panel to investigate whether BC has the capacity to clean up spills. The panel could take up to two years to perform its work, in effect considerably delaying the construction of the pipeline expansion.
Energy economist Mark Jaccard helped design BC’s carbon tax, and he still supports it. But he questions just how politically viable a stringent tax—at the level needed to meet climate targets—can really be. So he also continues to explore how other policies that the public find more acceptable could work.