PLANT

BC will keep its hands off pipeline royalties in deal with Alberta

The deal removes the prospect of Alberta holding BC's growing natural gas business hostage.


VANCOUVER – British Columbia has agreed it will keep its hands out of Alberta’s pockets where oil pipeline royalties are concerned with an agreement that removes the prospect of the neighbouring province holding BC’s natural gas hostage, but gives British Columbia little else.

With hopes of a trillion-dollar liquefied natural gas industry in her province’s not-too-distant future, BC Premier Christy Clark announced a deal with Alberta’s Alison Redford that takes the prospect of a greater share of the neighbouring government’s revenues from heavy oil pipelines off the negotiating table.

After more than a year of frosty relations and on-again, off-again meetings, the two premiers announced it is not for the two provinces to negotiate the benefits that BC has set out as a condition for approving pipeline projects from Alberta.

Clark announced she will sign on to Redford’s national energy strategy and that she has agreed none of Alberta’s royalties from oil pipelines will be going into BC coffers.

“There are lots of different forms that economic benefits can take, and I’ve said that right from the very beginning. But when it comes to royalties, British Columbia has an interest in ensuring that provinces protect their royalties because we also receive really substantial royalties from our natural gas industry,” she said. “We’re creating a liquefied natural gas industry that is going to be worth a trillion dollars over 30 years. A large part of that will be royalties so we want to protect our royalties and we recognize that Alberta wants to protect theirs.”

In return, the two leaders announced “Alberta agrees that BC has a right to negotiate with industry on appropriate economic benefits.”

Redford said the agreement is not about “gotcha politics.”

“This is about putting in place economic models that are going to work for Canada, for each of our economies and allow for product to move,” she said at a news conference that was on, then off, then on again, with Redford in Vancouver to deliver the keynote address at an oil and gas forum.

In her speech to the Vancouver Board of Trade conference, Redford noted that 42% of the three billion cubic feet of natural gas that BC is already producing passes through Alberta on a daily basis.

“BC is Alberta’s gateway to Asia, and our second-largest provincial export market, while Alberta is BC’s entry point to the North-American heartland and, by far, its biggest provincial export destination,” she told about 300. “Our provinces share economic destinies.”

This new framework for negotiations makes it clear that money will not be part of the talks between the provinces. Instead, BC has agreed to take demands for financial compensation directly to the oil and gas industry when projects such as Enbridge’s Northern Gateway pipeline are proposed

Clark had previously refused to sign onto Redford’s push for a national energy strategy because of the dispute. Clark has now agreed to endorse the national plan.

Redford suggested their announcement brings the provinces closer to an ultimate agreement on pipelines that would deliver Alberta oil products to the BC coast for export.

Kinder Morgan has proposed a massive expansion of its existing Trans Mountain pipeline from Alberta to the Vancouver area.

Ben West, of ForestEthics, one of the most vocal opponents of Northern Gateway and other pipeline expansions, said Clark has “flip-flopped” on her position.

“There isn’t a mandate for pipelines in BC,” he said.

Art Sterritt, of the Coastal First Nations, said the agreement is meaningless.

“Eighty per cent of British Columbians still oppose Enbridge’s proposed project. This agreement does nothing to change that.”

©The Canadian Press