MNI INTERVIEW: BC Minister Calls New Oil Line 'Social' Project

British Columbia’s Energy and Climate Solutions Minister Adrian Dix told MNI Alberta’s proposal for a new oil pipeline through his province a “social enterprise” with no private-sector backer since it's likely to be unprofitable.  

"It would essentially be a social enterprise, meaning not a profit making enterprise, and that's a lot of disruption for that purpose, when there are better options available to the federal government and to the industry," Dix said in an interview. "We have significant projects that are real projects." 

"The Alberta government and others are using their influence to try and create such a project. But there's a reason why there's not a project," Dix said. "It's not just an issue of whether Alberta has oil or doesn't have oil," he said, "it's whether the pipeline is an economic venture or not." 

The comments stand in contrast to the views of Alberta Premier Danielle Smith, who recently told MNI the pipeline is in the national interest. (See: MNI INTERVIEW: Alberta Says BC Pipeline Must Be Fast-Tracked)

Prime Minister Mark Carney wants a list of nationally important projects fixed in the next few months and final approval within two years, and Dix didn't say directly how his government would deal with any federal push for a western pipeline. Instead, he pointed to federal law banning some oil shipments off the B.C. coast and Ottawa's nationalization of the Trans Mountain line after Kinder Morgan abandoned the project, followed by construction costs five times higher than early estimates. 

While the federal government has power over projects across provincial borders, Carney says he will respect local and indigenous leadership wishes. British Columbia will also find it difficult to break ranks with a majority of Canadians saying in polls that drastic steps are required to resist U.S. threats of economic domination.

CLEANER IS BETTER

The expanded Trans Mountain line has boosted Alberta shipments to the west coast 367% and there are cheaper ways to grow further without a new pipeline, Dix said.

“Certainly minimal, not CAD50 billion dollars,” he said. The planned optimization of TMX will only need around CAD3.5 billion and is projected to increase capacity another 245,000 bpd. TMX has a current capacity of 890,000 bpd and Dix says in the past six months the line has been running at about 80% capacity.

Dix agreed with Carney's talk of making Canada a clean energy superpower and B.C. will submit clean projects to the federal list. His favorite is the North Coast Transmission Line he said is about ready to go and called helpful to developing critical minerals.

“In fact, there is a line. In fact, there's negotiations and significant development for partnership with First Nations. In fact, BC Hydro is moving forward and we're seeking to have shovels in the ground within the next year,” Dix said. (See: MNI: Carney Has Support To Break Longtime Big Project Barriers)

HAVE TO DIVERSIFY

B.C. has proposed 18 projects to the federal government and nine of them are in renewables and currently under development. Another three LNG projects are underway with up to CAD50 billion in capital expenditure, on top of the first overseas shipments from a new terminal, Dix said. 

The drive for overseas energy sales comes with U.S. President Donald Trump threatening 35% tariffs Aug. 1, and Dix said investors would be wrong to assume the administration will back off its threats. 

“When people’s livelihoods and circumstances are at stake, we shouldn’t view this as a card game,” Dix said. Tariffs are already hurting the local aluminum industry including a Rio Tinto site in Kitimat, he said.

"The change that we're seeing is a permanent change in the relationship," Dix said, to the point where Trump is questioning long settled treaties around cross-border water use. "We have to diversify because the trade circumstances that we've understood to be in place for multiple generations have been put in question not by us but by the United States.”