April 17 (UPI) -- In a shot across the bow of its western neighbor, Alberta's provincial government said it proposed legislation that could block cross-border oil and gas flows.
A consortium led by pipeline company Kinder Morgan in 2013 proposed an expansion that would triple the design capacity of its Trans Mountain oil pipeline to 890,000 barrels per day. It's already spent about $860 million on the project, but backed off last week after expressing concerns about the risk to shareholders from regional voices of opposition.
Kinder Morgan said the controversy over the Trans Mountain expansion "has escalated into an inter-governmental dispute."
Economic growth forecasts for a provincial economy hammered by the recent oil market downturn point to expansion if pipeline projects like Trans Mountain go forward and Alberta's government during the weekend said it could be a financial partner in the project if necessary.
New legislation proposed would give the provincial government the authority to mandate that any company that exports oil, natural gas or fuels apply for a license to do so. Export restrictions could extend to pipelines, rail and truck. Alberta Premier Rachel Notely said the proposal was necessary because of restrictions put in place in British Columbia.
"This is about protecting the jobs and livelihoods of thousands of Albertans and our ability to keep Canada working," she said in a statement. "We did not start this fight, but let there be no doubt we will do whatever it takes to build this pipeline and get top dollar in return for the oil and gas products that are owned by all Albertans."
Alberta's government said British Columbia gets about a quarter million barrels of oil and 200,000 barrels of fuels per day through the existing Trans Mountain network.
British Columbia in January considered new regulations on bitumen, a heavier type of oil found in Canada. Included among the proposals was a restriction on transportation until the government determined what would happen if there was a spill of the thicker type of oil.
Two years ago, leaders in Burnaby, a city in British Columbia, filed an appeal in federal court against the approval of Kinder Morgan's plans. The city said it and its residents were concerned about the risks from more oil, the 13 planned storage tanks in its community and the increase in oil tanker traffic along the western Canadian shore.
Notely met during the weekend with British Columbia Premier John Horgan and Canadian Prime Minister Justin Trudeau to discuss the project. Horgan had no comment on Alberta's latest move, but said before meeting with his counterparts he was making it very clear that he would "continue to stand up for the interests of British Columbians and defend our economy, our coast and inland waters from the risk of a diluted bitumen spill."
Kinder Morgan said it was looking to resolve the spat by the end of May. If it can't, the company said it was difficult to find a way forward.