The B.C. government has submitted a reference to the BC Court of Appeal asking for clarity on whether it is within the province’s power to enact environmental laws that would restrict the flow of diluted bitumen through B.C.
But it appears to be relying in part on an argument from ignorance, since one of its arguments is that not enough is known yet about how diluted bitumen might behave when spilled in the marine environment. Whereas there have been a number of crude oil spills at sea, there has never been a major tanker spill involving dilbit.
“We believe British Columbia has legal authority to regulate the movement of such substances through the province by permit,” Attorney General David Eby said in a press conference April 26. “Others disagree. This is a question that deserves and answer and certainty.”
The B.C. government argues that there are gaps in knowledge when it comes to how diluted bitumen behaves when spilled in a marine environment.
That begs the question: If the government is so concerned about the uncertainty of dilbit’s behaviour at sea, why has it not moved to also restrict the flow of dilbit that already moves through B.C. via the existing Trans Mountain pipeline and the Westridge Marine Terminal in Burnaby?
Asked that question, Premier John Horgan said: “The existing flows were approved and permitted by the federal government. We did not have the authority to stop them then, and we’re asserting our ability to ensure that the increases don’t happen in the future.”
Of the 300,000 barrels per day (bpd) of petroleum products that moves through the existing Trans Mountain pipeline, an estimated 80,000 bpd would be diluted bitumen. the rest is conventional crude, and refined products, like gasoline and diesel.
Twinning the pipeline would triple the pipeline's capacity and result in increased oil tanker traffic.
The BC Court of Appeal will be asked to review proposed amendments to B.C.’s Environmental Management Act, which would give the province the authority to place permits and conditions on “hazardous substances above a specified minimum level,” Eby said.
It will also ask if there are any federal laws that would make the provincial law “inoperative.”
The B.C. government argues that the science is still too unsettled on the question of whether or not diluted bitumen poses more of a risk to the environment than other forms of crude oil.
“There are gaps in our knowledge,” said B.C. Environment Minister George Heyman. “These were identified in the 2015 report by the Royal Society of Canada. We need to fill those gaps in knowledge.”
But the study Heyman referenced did not focus exclusively on dilbit. It focused on all types of crude oil, and many of the knowledge gaps identified in that study were not specifically related to dilbitl. The Royal Society study also suggested the conditions of a spill – where and when it occurred, and the weather conditions – may be just an important, in terms of a spill response, as the type of crude spilled.
Under the Canadian constitution, the federal government has the ultimate authority over interprovincial pipelines, although provinces do have the ability to enact laws for environmental protection. The question for the court is whether those laws are trumped by federal ones.
“Environmental protection is an area of greyness within our constitution because it wasn’t contemplated in 1867 and not a lot of jurisprudence has been put forward since then to confirm where jurisdiction lies,” Horgan said.
One of the moves the NDP government made in its attempts to halt the $7.4 billion expansion of the Trans Mountain pipeline expansion was to announce earlier this year that it would enact legislation to keep the volume of diluted bitumen that already flows through B.C. at current levels.
It backed off somewhat when the Alberta government responded with a boycott of B.C. wine.The Horgan government announced it would hold off on that legislation until it could get a court ruling on whether it had the authority to enact such legislation.
By the time the courts get around to making any kind of ruling, Kinder Morgan Canada (TSX:KML) may well have pulled the plug on the expansion.
It has given the federal government until May 31 to give it the clarity it needs to move ahead. The company has said the project has become “untenable,” and may cancel it.
The result of such a decision would likely prompt a response from Alberta, which has introduced legislation that would give the province power to restrict the export of crude and refined fuels.
Alberta Premier Rachel Notley has suggested that her government could use the existing Trans Mountain pipeline, which is a multi-purpose line, to continue to ship diluted bitumen, but restrict the flow of gasoline and diesel. That would likely force refiners in Alberta to either start shipping more gasoline and diesel by rail and truck to B.C., increasing the price at the pumps for British Columbians.
