Canada: Trans Mountain Pipeline Canadian Province's Battle Over Pipeline Could Disrupt Supply to North American West Coast

Editor: Alexander Stark

Legislation introduced on April 16 would allow oil-rich Alberta to curb the flow of crude and fuel if neighboring British Columbia doesn’t drop its opposition to Kinder Morgan’s Trans Mountain pipeline expansion. The existing pipeline supplies the Vancouver area with as much as 60 % of its refined products.

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Alberta’s plan to cut crude and fuel shipments to British Columbia could ripple across the entire west coast of North America.
Alberta’s plan to cut crude and fuel shipments to British Columbia could ripple across the entire west coast of North America.
(Source: Bloomberg Finance LP)

Vancouver/Canada (Bloomberg) — Canada’s inter-provincial fight over Kinder Morgan's Trans Mountain pipeline escalated as oil-producing Alberta threatened to cut off fuel shipments to neighboring British Columbia. Alberta on Monday introduced legislation allowing it to halt exports of oil and gas to B.C., ramping up pressure on the coastal province to drop its opposition to the pipeline expansion.

If Alberta makes good on its threat, Vancouver drivers can expect to pay more at the pump. So too might people in Washington state and Oregon if the region’s refineries were to face a curtailment of Canadian oil shipments down the Puget Sound pipeline. Even Alberta’s own producers and refiners would take a hit, cutting off a key export link at a time when a pipeline bottlenecks have caused a glut and reduced the value of heavy oil-sands crude.

British Columbia would be the first to feel the the hurt if flows from the Trans Mountain pipeline are cut. The province imports more than half of its refined fuels, including gasoline, from Alberta, which also supplies Vancouver’s only refinery, Parkland Fuel’s Burnaby plant. The refinery accounts for a quarter of British Columbia’s transportation fuel.

Without supply from Alberta or the Parkland refinery, more than two thirds of the province’s fuel supply could be interrupted and would have to be made up with imports, said Dan McTeague, a senior petroleum analyst at GasBuddy. But Vancouver area import terminals “were not designed to replace, compensate for the dramatic loss of that substantial amount of fuel,” he said.

Parkland’s refinery also supplies 40 % of the jet fuel at Vancouver International airport via a 40-kilometer pipeline that runs directly to the airfield, according to the Vancouver Airport Fuel Facilities, which represents the carriers using the airport. The airport imports the rest of its needs from BP Plc’s Cherry Point refinery in Washington state by barge and tanker trucks.