The Alberta government introduced late Monday a new bill that would allow it to "restrict" exports of crude oil, refined products and natural gas, in response to ongoing challenges with its neighbor British Columbia over Kinder Morgan's proposed Trans Mountain Pipeline expansion.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
"We did not start this fight, but let there be no doubt we will do whatever it takes to build this pipeline and get top dollar in return for the oil and gas products that are owned by all Albertans," the province's Premier Rachel Notley said in a statement.
Of particular focus will be the Trans Mountain Pipeline that has a current capacity of 300,000 b/d, and runs from Edmonton, Alberta to Burnaby, British Columbia. In December the line shipped an average 258,000 b/d of crude oil and diluted bitumen and nearly 44,000 b/d of refined fuels, including gasoline and diesel, the Alberta government said.
The Kinder Morgan pipeline feeds British Columbia refineries, such as the 55,000 b/d Parkland facility in the Lower Midland area.
Puget Sound pipeline ships crude from Burnaby to Anacortes in Washington where it serves local refineries.
No comments were immediately available from Parkland on the potential impact of the bill.
Also it was not immediately clear if the export restrictions, if imposed, would include US refineries in Washington.
The bill does not stipulate any location to which crude oil or refined products cannot be exported through the pipeline, said Mike McKinnon, a spokesman at the energy ministry. The energy minister has the mandate to decide, he said.
Washington refineries imported 6.21 million barrels of crude in January, of which 5.36 million barrels was from Canada, according to the US Energy Information Administration.
The Puget Sound pipeline delivers Canadian crude from the Trans Mountain system to Phillips 66's 101,000 b/d Ferndale refinery and Andeavor's 120,000 b/d Anacortes refinery. The line also delivers crude to BP's Cherry Point refinery and Shell's Anacortes refinery.
Alberta government officials could not be reached for comment.
Kinder Morgan said last week it was stopping on non-essential spending on its proposed Trans Mountain expansion until it has regulatory certainty. The federal government has cleared the project, but British Columbia is opposing the expansion for environmental reasons.
Under the bill -- labeled as Canada's Economic Prosperity Act -- companies exporting petroleum and natural gas from Alberta will be required to obtain a license, the provincial government said.
The license would be issued by the minister of energy if it is determined to be in the public interest, including whether adequate pipeline capacity exists to maximize the return on these resources produced in Alberta, it said. Shippers would not be automatically required to apply for an export license and would only be directed to do so if the minister deemed it necessary.
"Consideration would also be given to ensuring enough supply is maintained for Alberta's needs, now and into the future," it said. "A licence could be issued to a company but for a lower amount than it has previously been exporting."
Shippers that do not comply with the terms of a license could face fines of up to C$10 million/day, while individuals could face fines of up to C$1 million/day, it said.
Of the total 300,000 b/d of capacity on Trans Mountain, 221,000 b/d is allocated to refineries with connections in British Columbia and Washington State and the remaining 79,000 b/d is allocated for the Westridge terminal for exports, the Canadian Association of Petroleum Producers said in it latest annual report.