Trans Mountain: British Columbia Can not Limit Oil Shipments

The British Columbia Court of Appeal ruled that the province could not limit shipments of diluted bitumen across its borders in a win-win decision for the future expansion of the Trans Mountain Pipeline and Alberta’s efforts to channel its resources to foreign markets.
British Columbia had asked the court to rule on the constitutionality of one of its laws, which provides for the establishment of a licensing system for companies that wish to increase the flow of heavy oil into the province.

The five-judge panel of the Court of Appeal unanimously concluded that British Columbia’s legislation was not constitutional since it interfered with the federal government’s exclusive jurisdiction over interprovincial pipelines.

Judge Mary Newbury wrote, on behalf of the committee, that the content of the proposed amendments was intended to impose conditions and, if necessary, to prohibit the transportation of heavy oil as part of a federal undertaking.

Newbury JA also wrote that the legislation was not simply an environmental law of “general application” but that it was for one substance, heavy oil, in an interprovincial pipeline: the Trans Mountain Expansion Project.

“Upon entry into force, it would prohibit the operation of the Trans Mountain pipeline extension in the province until a provincially appointed official decides otherwise,” she said.

“This single element threatens to usurp the role of [the National Energy Board], which has made many decisions and imposed many conditions on Trans Mountain for the protection of the environment.”

British Columbia argued that the law was intended to protect its soils, rivers and lakes from possible spills, but Alberta and the federal government were hammering out that the province’s goal was to postpone or block Trans Mountain’s expansion. .

Newbury JA wrote that while the legislation was not intended to isolate the expansion project, it was likely to affect – and even “abruptly interrupt” – all of Trans Mountain’s activities as a carrier and exporter. of oil.

It added that the National Energy Board (NEB) was the regulator of the flow of energy resources across Canada to export markets, and that it had already imposed many conditions on Trans Mountain.

In addition, the expansion is not just a British Columbia project because it affects the entire country, the judge said.

The proposed amendments would have required Trans Mountain, or any other company wishing to increase the amount of heavy oil transported through British Columbia, to apply for a “Hazardous Substance License”.

The permit application should have detailed the risks to human health and the environment related to a spill, the mitigation plans for these risks and the financial measures, including insurance, guaranteeing the payment of cleaning costs.

A provincial official would have had the power to impose conditions on a dangerous substance license and to cancel or suspend the license if the company did not comply.

British Columbia announced the legislative changes in January 2018, triggering a trade war with then Alberta Premier Rachel Notley, who responded by banning British Columbia wines in her province.

Prime Minister John Horgan eased tensions by promising to ask the Court of Appeal if the amendments were constitutional, which convinced Notley to suspend the wine ban in February 2018.

Prime Minister Justin Trudeau’s government purchased the Trans Mountain Pipeline and its $ 4.5 billion expansion project. Construction was halted last August when the Federal Court of Appeal overturned federal permits.

The project would triple the pipeline’s capacity to transport diluted bitumen from Edmonton to Vancouver, and increase the number of tankers in Burrard Bay by seven-fold.

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