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09:57, 18 July 2018 Wednesday
Update: 13:59, 15 April 2018 Sunday

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Canada's Trudeau squeezed in pipeline crisis
Canada's Trudeau squeezed in pipeline crisis

The dispute pits the country's two westernmost provinces against each other as oil-rich Alberta boycotts trade with British Columbia over its opposition to the pipeline.

World Bulletin / News Desk

Canadian Prime Minister Justin Trudeau is caught in a political crisis over the expansion of an oil pipeline that has shaken investor confidence in the country's crucial energy sector.

Alberta Premier Rachel Notley warned the standoff risked triggering a constitutional crisis, and Trudeau is cutting short an overseas tour to return home and mediate.

With an election due by October 2019, Trudeau needs the support of British Columbia voters to win a second term as leader of the world's seventh-largest oil producer.

But the hit to the economy if the pipeline isn't built could have equally devastating effects at the ballot box, and Trudeau needs Alberta aboard to meet his international climate commitments.

Trudeau's Liberal government in 2016 approved the tripling of the Trans Mountain pipeline's capacity to move 890,000 barrels of oil per day from landlocked Alberta's oil sands to the Pacific coast, for shipping to new overseas markets.

But it has faced intense opposition from environmental and indigenous groups concerned about the risk of oil spills along Canada's pristine west coast affecting tourism and fisheries.

Nearly 200 protestors were arrested in the past month alone.

British Columbia's new social democratic government joined the fight against the project late last year when it looked all but lost, reviving hopes of killing it and pitting the province against Alberta, Saskatchewan and the federal government, which has deemed it to be in the "national interest."

Feeling squeezed, Kinder Morgan, the US firm behind the Can$7.4 billion (US$5.9 billion) project, suspended most work on the pipeline this week, saying the row is creating undue risk for investors.

The company gave the parties until May 31 to resolve their differences or it would scrap the project, prompting warnings from business groups that tens of billions of dollars in energy investments could be diverted from Canada if the project fails.

On Sunday, Trudeau will interrupt a trip to Peru, France and Britain to try to mediate the British Columbia-Alberta spat.

Alberta's Notley has responded to British Columbia Premier John Horgan's court challenge of the project with a boycott of British Columbia wines and hydro electricity, and threats to cut off gasoline shipments to Vancouver.



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