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While 2024 marks the most important milestone for the Trans Mountain pipeline expansion project (TMX) – namely, its completion – it also marks the fifth anniversary of the beginning of a significant legal battle between the governments of B.C. and Alberta.

It might seem like that battle had a winner and a loser, especially since the two provinces were on opposite sides of the TMX debate. However, as an important new study shows us, this battle should have been a non-zero-sum game – in other words, a win-win.

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The tremendous tumult triggered by the tactic of “turning off the taps” stands in stark contrast to the quiet détente that now prevails five years later. B.C.’s subdued ambivalence to TMX’s completion would surely come as a shock to a time-traveller from 2019’s political maelstrom.

Shortly after becoming premier, Jason Kenney officially proclaimed Alberta’s “turn off the taps” legislation (the previous NDP government originally passed the law). The intent was to restrict or halt energy shipments to B.C. if efforts to obstruct TMX persisted. In response, B.C. announced its intention to challenge the constitutionality of Alberta’s law.

In the end, Alberta never did “turn off the taps” and B.C. ended up on the losing end of the court challenge (similar to B.C.’s attempts to usurp federal jurisdiction on TMX).

David Eby – now B.C.’s premier, who served as attorney general during the throes of this battle – at one point dismissed Alberta’s tactic as a “bluff.” He argued that any attempts to block shipments to B.C. would also be vehemently opposed by the energy companies who want to be free to ship and sell their product.

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So, no, Alberta didn’t follow through and, yes, energy companies have a keen interest in being able to ship products through pipelines. But this is where B.C. badly miscalculated in its approach to TMX and why the failure to stop TMX benefited both provinces.

As it turns out, the companies Eby claimed would never want to “turn off the taps” were the ones who did the next closest thing. While the TMX debate focused largely on bitumen exports, the pipeline – both the original and the newly expanded version – is unique in that it can also ship other products, including gasoline and diesel.

The delays in building TMX meant years of reduced pipeline capacity and a subsequent need to prioritize the available space. As detailed in a report for the C.D. Howe Institute by University of Calgary economist Kent Fellows, the resulting bottlenecks meant shipments of refined products were reduced so that crude oil shipments could increase.

Fellows calculates that the supply reductions from this “big squeeze” cost residents in B.C.’s Lower Mainland approximately $1.5 billion annually – around $500 per person, per year. As much as B.C. endeavoured to stymie TMX, it’s only now that the project is in operation that residents are seeing this burden alleviated.

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In an added layer of irony here, it was also five years ago that B.C.’s government launched an inquiry into high gasoline prices. The inquiry’s terms of reference deliberately excluded the effects of expanding the Trans Mountain pipeline, which conveniently helped to hide what we now know to be an uncomfortable truth.

While many factors delayed TMX’s eventual completion, B.C. surely bears much blame. When they abandoned the project, Kinder Morgan especially cited the uncertainty caused by the B.C. government’s opposition and the threats to use “every tool in the toolbox” to stop TMX.  A shorter timeline would have meant considerable savings for B.C. residents.

Hopefully, this experience can provide some valuable lessons for future projects. As Prof. Fellows notes, maintaining and growing our economy depends on being able to move goods around and across the country and these kinds of “squeezes” create costly barriers.

There are enough barriers; we should avoid the kind of needless battles that TMX produced.

“Afternoons with Rob Breakenridge” airs weekdays 12:30-3 p.m. on QR Calgary Radio [email protected]  X: @RobBreakenridge

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