Filling up in B.C. could cost $120 if Alberta cuts off oil supplies amid Trans Mountain fallout

CALGARY – Business groups in British Columbia are turning on the provincial government as analysts fear a proposed law in Alberta could increase costs on a range of goods across the Lower Mainland.

A trade war between B.C. and Alberta over the $7.4-billion Trans Mountain pipeline project to the West Coast could soon result in oil-rich Alberta cutting off petroleum supplies to B.C. and send prices for gasoline, diesel and even consumer goods soaring.

Alberta Energy Minister Marg McCuaig-Boyd’s Bill 12, Preserving Canada’s Economic Prosperity Act, is now on the order paper in Alberta.

“We’ve been clear that if the government of B.C. persists in attacking our jobs and economy, they will face serious consequences. We’ve been saying for a long time that this bill will focus on giving us the power to control our oil and gas products that belong to Albertans,” McCuaig-Boyd said in an email.

She declined to provide the specific contents of the bill, citing legislative process, but other lawmakers have indicated it would inflict economic pain in B.C.

“Their government has caused pain to Alberta families,” Alberta Deputy Premier Sarah Hoffman said of B.C. in the legislature on Tuesday. “We can certainly do the same, and we’ve put a bill on the order paper that enables us to do that.”

The prospect of restricting oil flows is causing stress among B.C. businesses, who have begun to call on Victoria to drop its opposition to the pipeline, which caused proponent Kinder Morgan Inc. to announce this week it would pare non-essential spending on the project until the federal government steps in.

“The impasse created and sustained by the provincial government is now challenging — in full view of the international investment community — the very ability of our country to govern itself,” Greater Vancouver Board of Trade president and CEO Iain Black said in a release, which called on Victoria to “immediately stand down” as the trade war escalates.

Other groups expect Alberta’s plans will result in higher costs for fuel, but also for consumer goods like groceries as trucks transporting those goods around B.C. will pass higher transport costs onto consumers.

“Trucks are going to start using fuel surcharges,” said Chris Gardner, the president of the Independent Contractors and Business Association of British Columbia.

“It would be significant and it would impact people’s daily lives. People need to understand that this is quite serious,” he added.

He said restricting oil flows to B.C. would affect his members, especially those that drive long distances through the interior of the province to remote worksites.

Analysts have provided mixed forecasts on how much fuel costs would rise if Alberta cuts off all petroleum product shipments to B.C., but they all point to higher fuel prices, especially in Vancouver and the surrounding areas.

“Every facet of B.C.’s economy would be affected — forestry, mining,” said GasBuddy senior analyst Dan McTeague, adding that the resource industry uses a lot of diesel in their operations.

McTeague said the average price for gasoline in the Lower Mainland right now is $1.50 per litre, but a complete restriction on oil, gasoline, diesel and jet fuel shipments would immediately send prices in the area to $2 per litre as fuel distributors ration supplies to fill-up stations.

That would mean the cost to fill up a typical car with a 60-litre tank would cost $120, and the cost to fill up a pick-up truck would be $200.

McTeague said it would be challenging for the Vancouver region to source alternative supplies of gasoline, because shutting down the existing Trans Mountain pipeline would also affect Washington.

Victoria, he said, already has infrastructure in place to import gasoline and other refined products by sea, and could be spared the worst of price escalation. Despite its port, Vancouver does not have specialized gasoline import facilities by sea.

“You can’t take an oil terminal and turn it into a gasoline terminal. Unloading gasoline is far more dangerous than unloading oil,” he said.

Kent Group senior vice-president Michael Ervin said he expects fuel prices to rise in the region, but by a more modest 10 cents per litre “above what is already a high wholesale price.”

He said there would eventually be an alternative supply of petroleum to the Vancouver and Victoria areas, but “it would be a real search for terminal operators on the West Coast to find alternate sources of supply.”

Those terminals, he said, would be paying “at spot prices as opposed to contracts.”

B.C. Green Party leader Andrew Weaver, who is supporting NDP Premier John Horgan’s minority government, called worst-case-scenario predictions around Trans Mountain’s cancellation “fear-mongering” in a release.

Horgan has similarly defended his government’s opposition to the pipeline and said he’s trying to boost environmental protections in B.C. He said he was “surprised” that Alberta would move ahead with a bill to inflict economic pain on his province.

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