Oilpatch watches nervously as B.C. heads to the polls
What would an NDP government in B.C. mean for Alberta's oilpatch?
Alberta is still grappling with a hostof problems, chief among them sluggish oil prices that are still too low to justify much new investment in the energy sector.
Butpipelinewoes, while not fully resolved, had at least been moving in the right direction for the province. With federal approval and a permit from British Columbia, Kinder Morgan is set to make a final investment on the Trans Mountain expansionin the coming weeks, with construction possiblystarting in the fall.
- Trans Mountain expansion gets B.C. green light
- Kinder Morgan in talks on $6.8B Trans Mountainfinancing
But as B.C. voters headto the polls on May 9, Trans Mountain is back in flux. Recent polls suggest the NDP is slightly ahead, but with a margin of error that makes the electiontoo close to call.
Nonetheless NDP Leader John Horganispromising changes that are causing consternation in the oilpatch, one province away.
The Trans Mountain 'toolbox'
While B.C.'s Liberal government took its time coming around to Trans Mountain, it eventually granted a permit to Kinder Morganafter saying the company had met its conditions of approval.
B.C.'s New Democrats, on the other hand, are firm in theiropposition to Trans Mountain.
The NDP's platform says that if elected, New Democratswill use "every tool in our toolbox" to stop the project from going forward. What that means is unclear.
"There aren't a lot of tools in that toolbox;the federal government has decided that it's going to go forward,"said Trevor McLeod, who directs energy policy research at the Canada West Foundation in Calgary.
"Of course, politicians are able to turn those toolboxes over and stand on them and shout loudly and try to convincevoters that it's not a good idea."
The Kinder Morgan pipeline has not been top of mind in the B.C.election. Voters have been more focused on housingaffordability, for both buyers and renters, and more recently, on the personalities of the three party leaders.
"Energy issues haven't figured very prominently in the campaign," said Jock Finlayson, vice-president of the Business Council of B.C."Including the Kinder Morgan pipeline expansion, somewhat surprisingly, given how contentious that's been."
A moratorium on fracking?
Fracking is also on the NDP's radar.
The northeastern corner of British Columbia is home to a number of shale natural gas fields, such as the Montney and Horn River basins. The gas is produced through hydraulic fracturing, known as fracking. The most recent numbers from December 2015indicate that B.C.produced five billion cubic feet a day of gas. That's a significant amount, about half of Alberta's production.
The NDP says it would appoint a scientific panel to review the practiceto ensure the gas is produced safely.
Finlayson said he wouldn't be surprised if the NDP, if elected, slapped a moratorium on new fracking permits during that review.
"That's my understanding," he said. "That's not something the industry would be keen to see, but I thinka moratorium would include the appointment of a panel that would do a fairly quick review, because there has been lots of work done across North America on fracking."
Conditions on LNG
In the 2013 B.C. election campaign, the Liberals were focused on the need to buildLiquefied Natural Gas plants to get the province's gas offshorefor a better price. But B.C. missed the first window of opportunity to export LNG, beaten by both Australia and the United States. Its best bet now is to get a plant built in the early 2020s, when demand for LNG is expected to increase.
The NDP says it will place four conditions on LNG projects, none particularly onerous. One calls for the project to provide jobs to local residents, for example.
"B.C.and Canada havebeen through the wringer on this," saidMcLeod of the Canada West Foundation."There are additional challenges that will make investors look more than once."
ButMcLeodsuggests that new conditions for LNG are just another instance of a Canada-wide problem with competitiveness.
"There's a whole bunch of these issues," he said. "And I don't know where I'd rank (LNG conditions) ... but I do think that Canada needs to pay close attention to its competitiveness."
Possible minoritygovernment
Liberal Leader Christy Clark has also thrown a curveball at Alberta, first by asking the federal government to ban the export of thermal coal from B.C. ports, or, failing that, toimpose a$70 atonnetax that would make exporting coal from the province of Alberta uneconomical. That would hurt an industry that's already on the ropes in the province.
There's a strong possibility that B.C. could end up with a minority government, in which the Green Party would holdthe balance of power. The Greens held one seat in the legislature before the election, but is polling well enough that it could pick up a few more.
If either the Liberal Party or the NDP are just short of the 44 seats needed to form a majority, the Greens will be in a position to push the party'sagenda.
"It's not evident which party theywould support;they've been fairly coy about that," said Finlayson.
But he expects there would be "horse tradinggoing on" in terms of climate and carbon policy if the Greens are in the driver's seat following the election.
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