Just over two weeks after the Liberals’ upset triumph in the British Columbia election, the province’s government officially came out against the proposed Northern Gateway pipeline.

A cynic might have expected the province to drop its fight very quietly soon after the election. Instead, we’ll have a few more innings of posturing until the federally appointed Northern Gateway Pipeline Joint Review Panel recommends to the federal cabinet in December whether or not the project should receive its National Energy Board certificate and proceed.

Northern Gateway would transport 525,000 barrels per day of bitumen blend (heavy oilsands crude diluted with a very light oil known as “condensate” so it can flow) from a hub northeast of Edmonton, 1,177 kilometres to a marine loading terminal in Kitimat on B.C.’s Pacific coast. A smaller pipeline would bring imported plus recycled condensate back to Alberta.

Serious export pipeline-capacity constraints are already forcing down the intra-Canadian price of heavy crude oil. U.S.-based purchasers, such as refining companies, are reaping billions of dollars per year in additional profits. The lack of export pipeline capacity isn’t bad for just Canadian oil producers; it’s bad for every level of government, due to lower corporate tax revenue and reduced employment.

The B.C. government’s opposition to Northern Gateway made cynical sense through the lens of Lower Mainland electoral politics. Substantively, however, the opposition was strange – and now borders on the bizarre. In addition to undermining Northern B.C.’s economy, Northern Gateway isn’t B.C.’s to stop. It’s a federally regulated project, and for this very reason – that one province doesn’t hold another’s economy hostage. Under Canada’s Constitution, boundary-crossing public works and international trade are unambiguously federal jurisdiction. One province cannot prevent the goods and commodities of another from reaching international markets. If B.C. tries to block the pipeline even after it receives a federal licence, the federal government could declare Northern Gateway vital to the “peace, order and good government” of Canada.

But it was B.C. premier Christy Clark who vocally demanded more of the pipeline’s “economic benefits.” Direct employment will be 560 long-term jobs. And what did Clark mean: “a portion of the actual oil”? Also, under that ol’ Constitution, one Canadian government cannot tax another. B.C. can’t assert ownership over Alberta’s oil. What would be next – grabbing every tenth iPod out of trucks carrying retail goods from Vancouver Harbour to the Prairies? Impounding one in every dozen grain or potash railcars coming from Saskatchewan to unload in Delta, B.C.?

Clark’s attitude harkens back to the Middle Ages – when every city, duchy and principality confiscated a portion of virtually anything that moved through its lands.

B.C. should be glad it is blessed with superb deepwater ports that generate tens of billions of dollars in economic benefits in their own right. The way to increase those benefits is to help those ports grow by approving projects such as Northern Gateway. A B.C. business leader has already proposed building a giant oil refinery in Kitimat, using Northern Gateway’s crude. Now, that would be economic leverage – to the tune of billions of dollars per year.

More of Koch’s writing can be found at www.drjandmrk.com.

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