BC Has No Power To Regulate Crude Flowing Through Trans Mountain

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The Trans Mountain oil pipeline was handed a win on Friday when a British Columbia court ruled that the provincial government could not legally restrict crude oil flowing through it. according to the Court of Appeal for British Columbia website.

While Trans Mountain still faces an uphill battle in a climate that is cooling to crude pipelines. Friday’s win is good news for the project and good news for the Canadian government. who purchased the Trans Mountain pipeline last year when it became clear that Trans Mountain had stalled and needed a push. The push. in that the government purchased the project. proved insufficient to definitively move the project along.

Instead. the project has languished in pipeline purgatory as Canada’s federal government. BC. Alberta. indigenous groups. and environmentalists continue to wage war over the controversial project.

Trans Mountain is a crucial oil project for Canada and is expected to almost triple the amount of oil flowing from Alberta to the coast in British Columbia. Canada. which has struggled to get its oil to market thanks to takeaway capacity constraints. has seen the price of its benchmark. Western Canadian Select. trade at a steep discount to WTI. prompting mandatory production cuts to keep the prices higher.

Today’s ruling by the BC court definitely put the Trans Mountain pipeline under federal jurisdiction. In its judgement. the summary read:

On a constitutional reference by the Province of British Columbia. the Court opined that it is not within the authority of the Legislature to enact a proposed amendment to the Environmental Management Act. The amendment was targeted legislation that in pith and substance relates to the regulation of an interprovincial (or federal) undertaking — the expanded interprovincial pipeline of Trans Mountain Pipeline ULC and Trans Mountain Pipeline L.P. which is intended to carry ‘heavy oil’ from Alberta to tidewater. The amendment thus lies beyond provincial jurisdiction.