When Gas Pipelines Explode

20180911_Marcellus Shale Update

At 5:00 a.m. yesterday, a portion of the newly-built Revolution pipeline exploded in Center Township, Beaver County, western Pennsylvania.  Luckily nobody was hurt, but one home, two garages, a barn and several vehicles were destroyed.  Nearby residents described what at first sounded like an airplane crash or a freight train, then a fireball.  The fire burned out by 7:00 a.m., but parts of Interstate 376 were closed for hours and the Central Valley school district cancelled classes.

The Revolution Pipeline is a 24 inch gathering line owned by the star-crossed Energy Transfer Partners.  It is used to feed ETP’s Rover and Mariner East 2 pipelines.  Officials believe that a mudslide occurred in the vicinity and may have caused the explosion.

ETP of course, is the same company that has had such difficulty with Mariner East 2.  It is instructive that fear of moving earth in the form of sinkholes in Chester County caused the suspension of construction of Mariner East 2 earlier this year.  If a mudslide was sufficient to cause such a fireball in the Revolution, then ETP has some serious explaining to do about how Mariner East 2 will be safe given the geology of Chester County.

As I’ve written numerous times before, ETP has done itself no favors with its dismissive attitude toward governmental oversight and regulation.  Now, at perhaps the worst possible time (right before an election and with Mariner East 2 still not completed and operational) and with little to no goodwill among Pennsylvania State legislators or DEP officials, ETP must show how and why the Revolution exploded, why this won’t happen again and why residents near Mariner East 2 shouldn’t be suspicious of that pipeline.

The leaders of this demand for explanation should come from the industry itself.  The people at the Marcellus Shale Coalition and at the major producers like Cabot, Range Resources, Chesapeake and EQT need to be insisting that all work on such important projects be done correctly, without cutting corners, with maximum transparency and giving safety ultimate priority.  It is their industry that is at risk, and all of our futures.  It must be the industry standard to insist that all companies use best practices and to demand that any company which fails to do so not be allowed to continue operating in Pennsylvania.

There is no risk free method of energy generation and transmission.  We all know about the dangers of nuclear power.  You can generate electricity by solar and wind but you need dangerous high tension wires to transmit it.  Given the modern political realities regarding fracking and natural gas, however, it is in the industry’s interest to show that it will not tolerate anyone who won’t walk the extra mile for the safety of all Pennsylvanians.

In more mundane legal news, last week the industry received a split decision from Pennsylvania Commonwealth Court.  Ruling in the case of Marcellus Shale Coalition v. Pennsylvania Department of Environmental Protection, the Court struck down part of the Act 78a Regulations  which stated that as part of the well-permitting process the DEP had to consider comments and recommendations submitted by municipalities.

The background is a little confusing.  Previously in the Robinson case, the Pennsylvania Supreme Court invalidated what was known as Section 3215(d) of the regulations that said the Environmental Quality Board of the DEP “may” take such comments into account.  This was considered improperly minimizing local input.  The new regulation sought to cure this defect, but the Court said this fix would not work because the clause in the Act 13 Oil and Gas Law that gave the DEP the right to promulgate such regulations in the first place no longer exists.

The result of the ruling is hard to predict.  The Court also said the DEP did not exceed its authority in the regulations when it allowed applicants and public resource agencies, including municipalities, to provide information that could assist the Agency in deciding whether or not to grant a permit.  A lot of this seems inherently contradictory.

On the plus side for the industry, the Court ruled that the expansion of the definition of “public resources” in the Act 78a Regulations to include “common areas of a school’s property” and “playgrounds” was unlawful as it was “unduly burdensome” on the applicants.  The Court noted that a McDonald’s playground or a school parking lot utilized as a playground would be covered by this definition.  These uses were not of the same class or nature as a scenic river or public park.

Finally, north and east of the Pennsylvania border New York State goes to the polls today for its primary election.  Two-term Governor Andrew Cuomo has run an uninspired campaign against challenger Cynthia Nixon.  Ms. Nixon, known most for her role in Sex and the City, has forced Cuomo even more to the left than before.  Specifically, Nixon proposes that New York adopt a law requiring it to obtain all of its energy through renewable sources by 2050.  In her platform, Ms. Nixon criticizes the Governor by saying “his plan still won’t fully halt all new fossil fuel infrastructure.”

Cuomo’s policies already have led to a halt in the pipeline infrastructure for New York and New England, as well as a stoppage of much power plant construction.  Events like today’s explosion in western Pennsylvania can only add to the pressure on natural gas proponents.  Unfortunately for New York, their governmental officials have been overly optimistic in describing the current science for renewable energy.  New York officials will shut down Indian Point Nuclear Power Plant by 2021.  Given Massachusetts’s sad experience in predicting how it will make up the energy shortfall from mothballed nuclear plants, expect New York’s energy situation to become dire quite soon.

With Massachusetts likely to import more natural gas from Russia this winter, New Jersey and Maryland officials limiting construction of offshore wind and solar farms and Pennsylvania natural gas pipelines exploding, the time is more critical than ever to have an honest conversation on energy.  It needs to be led not by Cynthia Nixon, Josh Fox or the executives at ETP but by people who recognize the pluses and minuses of all forms of energy generation, storage and transmission, and who are not afraid to ask the stupid questions.

Questions? Let Dan know.

Daniel Markind of Flaster Greenberg

Daniel Markind is a shareholder at Flaster Greenberg PC with over 35 years of experience as a real estate and corporate transactional attorney. He has represented individuals and companies in the energy industry for over 20 years. Dan is a frequent lecturer on Marcellus Shale and other mineral extraction issues and is regularly asked to speak at conferences, in the media and at other venues regarding energy issues and their legal and political implications.

Marcellus Shale Update – 7.11.2018

President Donald Trump kicked off the 2018 NATO summit by blasting Germany over the Nord Stream 2 pipeline deal.  At the opening reception, Trump declared:

“We are protecting Germany, we are protecting France, we are protecting all of these countries and then numerous of the countries go out and make a pipeline deal with Russia where they are paying billions of dollars into the coffers of Russia.  I think that is very inappropriate.”

The Western press was stunned.  CNN posted as its website headline “Trump starts visit by insulting allies.”

Of course, readers and watchers of CNN probably have no idea what President Trump is talking about.  That network has been so busy talking about Michael Cohen, Rod Rosenstein and other sideshows it has ignored many of the world events that really shape our future.

If you think about it, it’s pretty incredible that readers of this blog, and the excerpts that I post sometimes on Linkedin and that get posted by other sites, are better informed about the Nord Stream 2 issues than readers and listeners of CNN, MSNBC or Fox.  My guess is that you will see a lot of scrambling today as these “news organizations” try to explain what the pipeline is all about.  It’s even possible that because of this, Stormy Daniels’s lawyer might not get on the air – at least for a day or two.

President Trump is absolutely right in both what he said about Nord Stream 2 and how he said it.  As I discussed last week, Nord Stream 2 is a problem from an economic standpoint in that it ties Germany more closely to Russia, it is bad environmentally because it encourages continued Russian development of natural gas without environmental constraints in a delicate Arctic ecosystem, and it is wrong politically in that it bypasses Poland, Ukraine and the Baltic States, cutting them off from transshipment payments.

Further, the Germans are doing this as they continue to fail to live up to their NATO commitment to spend 2% of the country’s GDP on defense.  As of 2016, only Greece, the UK, Estonia and Poland joined the US in living up to its NATO commitment.  Again as I mentioned last week, the Estonian Foreign Minister just came out against Nord Stream 2.

None of this has swayed German Chancellor Angela Merkel, who pushes forward with the pipeline plan.  Today she acted offended when the American President calls her out on it.

Much to the chagrin of the “smart set”, I imagine Donald Trump will get a lot of credit from Mr. and Ms. America for standing up to this sort of action by a European leader, which we have seen over and over again.  Don’t be surprised if the Baltic States and Poland reinforce President Trump’s concerns over Nord Stream 2 as the summit continues.  Donald Trump may have looked like the isolated leader coming into the NATO summit, but due to energy issues it may look very different coming out.

Questions? Let Dan know.

Marcellus Shale Update – 6.26.2018

For the second time in two months, a lead energy story comes from Canada.

On Monday, newly elected Ontario Premier (Governor) Doug Ford announced that he immediately would dismantle Ontario’s carbon cap and trade system.  Mr. Ford gave no specifics, but his announcement put $2.9B (Canadian) in carbon tradable allowances in limbo.  Already California, which was integrating its system with Ontario’s, announced it would no longer accept or trade Ontario carbon credits.  Quebec stopped as well.

Cap and trade is an attempt to find a quasi-free market solution to environmental externalities.  There are many variations of these systems, but in Ontario companies that emit at least 250,000 tons of greenhouse gasses per year have to purchase an equal amount of “allowances”. The allowances were made available at quarterly auctions and could be purchased on the free market, hence the integration with California and Quebec.

Regardless of how the program is wound down, the fact that Premier Ford is ending it will have repercussions among all such programs.  The more potential investors believe a program is subject to political influences the less they will be willing to participate, increasing prices and decreasing efficiency.  It’s one more byproduct of the politicization of the climate issue.

Another byproduct is the attempt to use the court system for political purposes.  Yesterday US District Judge William Alsup granted a motion by BP, Royal Dutch Shell, Exxon Mobil, ConocoPhillips and Chevron to dismiss lawsuits by the Cities of San Francisco and Oakland attempting to hold these companies liable for the impact to Bay Area residents of climate change.

From the beginning, this case went opposite the way the plaintiffs intended.  Attorneys for the defendants obtained copies of bond documents executed by the cities when they issued their revenue bonds in which they made no mention of any threat to public welfare from climate change.  The Judge held a special hearing to try to understand the science of climate change.  This did not go well for the cities.  Anticipated “smoking guns” – in the form of internal emails among employees of the companies suggesting they knew they were causing climate change but were hiding it – never materialized.

Instead, Judge Alsup ruled that while global warming was a real threat, it must be fixed by “our political branches.”  “The benefits of fossil fuels are worldwide,” he continued. “The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case.”

It is likely that similar suits brought by New York City and other municipalities will end up the same way.  This is a good thing, because we need as a society to decide what our future energy mix will be, not by judicial fiat.

Finally, on the same theme three new studies came out over the last two months that contradict the “environmentalist” position about the evils of fracking.

Peer reviewed studies from the University of Cincinnati, Penn State and Yale all reached the conclusion that there is little correlation between hydraulic fracturing and groundwater contamination.  The researchers were almost apologetic in their conclusions, noting in the Cincinnati study that the findings contradicted what they had expected.  Indeed, the Cincinnati study had been partially funded by environmental groups opposed to fracking.

This does not mean that fracking is pristine. It’s an industrial process that produces externalities like any other.  It does contradict all of those people who claim an overwhelming body of scientific evidence exists showing the evils of fracking.  I saw many of them in January at the Delaware River Basin Commission hearing in Philadelphia about the DRBC’s proposed fracking ban within the basin.  Indeed the science mostly goes the opposite way.  Let’s hope that, unlike our immigration  “debate”, we in the energy context can move beyond wild assertions and use science as our realistic guide to protect our one lonely planet.

Questions? Let Dan know.

Marcellus Shale Update – 6.6.2018

Following a contentious few months, the Canadian Federal Government bought out Kinder Morgan’s interest in the Trans Mountain Pipeline expansion stretching from Edmonton, Alberta to the Pacific Coast north of Vancouver.  For a price of $4.5B, the pipeline switches from private to public control, with all that entails.  It does not necessarily mean that the pipeline even gets built, however, as British Columbia continues to raise environmental objections that caused the delay in the first place and resulted in Kinder Morgan’s bailing out of the project.

Bucking continued Court victories by Kinder Morgan, threats from the Province of Alberta and the wishes of both the Canadian Federal Government and a majority of Canadians polled, British Columbia still refuses to relent.  Had the pipeline asset sale not been completed, Alberta Premier Rachel Notley was prepared to enforce Alberta Provincial Bill 12 which would have seen one Canadian Province embargo oil and gas shipments to another.  This would have raised fundamental issues of Canadian federalism and the basic concept on which the Canadian nation rests.  Instead, Canadian interprovincial trade seems to be preserved, and B.C. Premier John Horgan now has a tougher foe to face.  His opposition now is the Canadian Federal Government, not an American pipeline company or a sister Canadian province.

It’s very hard now to see how Horgan comes out ahead in this dispute, but indeed the entire matter is filled with degrees of losers and no real winners.  For Canada, $4.5B in private investment in the country simply evaporated.  Now in Federal hands, no one knows how or when the pipeline assets will be sold.  The business climate in Canada to attract private direct investment has taken a huge hit.  Alberta still is a long way from seeing the pipeline built, and Alberta needs the revenue to balance its budget.  Finally, Kinder Morgan Canada watched its shares tumble on the Toronto Stock Exchange as Trans Mountain provided its main source of growth potential.

Perhaps Chris Bloomer of Canadian Energy Pipelines Association said it best.  “We can’t do this again and we need to look forward to how we don’t get into this situation again.”

We in the United States should be watching the Trans Mountain controversy very closely.  It provides a case study of what happens when the national good gives way to parochial interests, but simultaneously those interests don’t trust the national government to strike the proper balance to preserve legitimate parochial rights.  We are dangerously approaching that point in the Northeast.  It would be helpful if all would pull back from their apocalyptic political pronouncements, as neither side’s political statements hold water when subjected to critical analysis.

A perfect example is the claim by certain political leaders that we need to move immediately to a “100% Renewable Energy” future.  Politicians who state this don’t understand what that really entails.  Indeed, they shield their eyes to the downside of even attempting to put that aspiration into practice given the state of modern science.

Central to the concept of “100% Renewable Energy” is the reliance on batteries to store and transmit the energy produced from sources like solar and wind.  Batteries use lithium and are dependent on a process involving cobalt.  Last month CNN, and this week Greentech, reported on how the world’s cobalt supply is dependent on child labor from the Democratic Republic of the Congo (DRC).   One analyst predicted that the percentage of the cobalt supply expected to come from the DRC will increase from its current 66% to 73% by 2023.

The DRC is an extremely poor, politically unstable country.  Despite claims that cobalt merchants are trying to ensure their supplies don’t come from mines known to exploit children, nearly all agree this simply isn’t sufficient.

There is no way around the conclusion that the greater reliance on “renewable” sources of energy means the greater mining of non-renewable minerals such as lithium and cobalt to store and transmit the renewable power.  That means more abuse of child labor in mining the non-renewable sources.

It’s not a pretty picture.  When you factor in the unreliability of some of these renewable sources and the environmental degradation that will come from converting millions of acres of pervious land to the impervious coverage needed to house the massive solar and wind farms and other infrastructure this “100% Renewable” world would require, you begin to question the environmental foundation on which such a plan rests.

There is a need for increased use of solar, wind and other “renewable” energy, and there is value in spending billions of tax dollars on research to improve our energy generation, storage and transmission.  However, given the state of modern science, the idea of converting all of our energy use to renewables is not sustainable, renewable or environmentally beneficial.  Some serious discussion on all of these points without the simplistic name calling would be a very useful exercise.

Questions? Let Dan know.

Marcellus Shale Update – 5.26.2018

The on again, off again saga of Mariner East 2 is off-again.  On Thursday, a Pennsylvania State Public Utility Commission judge again suspended construction of Mariner East 2 and 2X and the use of Mariner East 1 following a petition by State Senator Andy Dinniman.  Despite the pipeline being 98% complete, PUC Judge Elizabeth Barnes wrote that the pipeline constitutes an “emergency situation which presents a clear and present danger to life or property.”  She added “(t)he rupture of a hazardous liquid pipeline at the welds of an 8-inch pipe in a (high consequence area) such as West Whiteland (Township) and the ignition of such a potential vapor cloud could have catastrophic results.”

In the end, it is doubtful that Mariner East 2 and 2X will be stopped.  However, the long term effects of this process are truly harmful to the industry and all concerned.  Serious questions have been raised both about the pipeline route and the construction, and Sunoco Logistics, the owner of the pipeline, often has simply ignored the rules for construction.   This has raised community suspicion about the project and the PUC process.  It also has made a hero of Senator Dinniman, who is not a friend of the industry.  Critics who seek to fight other pipeline projects point to Mariner East 2 of an example where the industry cannot be trusted, and they have lots of ammunition.

Despite all of these issues, pipeline buildout in 2018 in the Northeast will exceed all previous construction.  The Energy Information Agency expects an additional 20Bcf/day to be added to capacity.  Unfortunately, that buildout is spotty geographically. In the I-95 corridor, where it is needed the most, we likely will see the least.  Winter 2018-9 could see the most extreme geographic variations yet in terms of natural gas price.

In contrast to Mariner East 2, Trans Mountain in Northwestern Canada presents the opposite situation.  The pipeline owner, Kinder Morgan, continues to win in court and generally follow the rules, while the provinces squabble with each other and hurt themselves.  The latest was the British Columbia Supreme Court throwing out a challenge by the City of Vancouver and the Squamish National indigenous tribe claiming that BC did not act reasonably earlier when it gave Kinder Morgan an environmental assessment certificate.  The Court also ordered Vancouver – which is fighting so hard against the pipeline but depends on coal for much of its economic wellbeing – to pay Kinder Morgan’s legal fees.

Kinder Morgan’s self-imposed deadline of May 31 still looms, and the company now is facing major cost overruns.  Both Alberta and the Canadian Federal Government have promised to assist in the financing of Trans Mountain, and Alberta needs the revenues from the pipeline to balance its budget, but neither has been able to make it happen.

Like Mariner East, the long term ramifications may be significant.  In Mariner East 2 it’s the suspicion engendered by the pipeline company, in Trans Mountain it’s the lack of trust in the Canadian business climate.  At this point I would guess that both pipelines get built, but each will result in long term residual yet needless damage.

Finally, construction continues on the Nord Stream 2 pipeline that will take gas from Russia to Germany through the Baltic while bypassing the traditional transit route through the Ukraine.  The Trump Administration is going all out to try to block its construction, even threatening our European allies with potential economic ramification should the pipeline be finished.

Germany, which is almost entirely dependent on Russian gas (notice how quiet it’s been on Russia matters over the last few years), is furious with the American position.  The United States is wary of increased Russian expansion of influence in Western Europe and sees this as a tool to isolate European nations such as Ukraine, the Czech Republic, Slovakia, Poland and the Baltic States.  All of these nations have faced energy price and supply manipulation in the past from Russia.  Not coincidentally, the Germans, who are held up as environmental paragons, are now so dependent on Russian gas that they have raised no environmental objection to a pipeline being built in the Baltic Sea being used to transport Russian gas produced in the Arctic.

There are three lessons here.  First, be wary of those who wrap themselves in the banner of environmentalism.  They tend to forget about that when their economic security is threatened.  Second, understand that the current German hostility to the Trump Administration is not just about ripping up the Iran Nuclear Deal or moving the American Embassy in Israel to Jerusalem.  Nord Stream 2 is far more significant.  Finally, notice that, contrary to claims that he is being soft on Russia, the Trump Administration is fighting far harder against Russian economic interests in Western Europe than did the Obama Administration.

I am neither a Trump hater nor supporter.  I want all American Presidents to succeed.  I do think though that Nord Stream 2 is more important than many of the stories we hear on the evening news.  We would be much better informed as a citizenry if CNN and its ilk took time out from Stormy Daniels’s lawyer and talked about the ramifications of what really matters to people.

Happy Memorial Day.

Marcellus Shale Update – 5.18.2018

The Canadian pipeline civil war got even nastier this week.  To those observant enough to notice, the warning sirens for the United States are blaring.

On Wednesday, the Alberta provincial government followed through on its threat to neighboring British Columbia by passing a law permitting Alberta to control who receives Albertan energy shipments.  Premier Rachel Notley said that “if the path forward for the (Trans Mountain) pipeline through B.C. is not settled soon, I am ready and prepared to turn off the taps.”

Immediately B.C. Premier John Horgan responded by threatening to seek an injunction preventing Alberta from ever using the law.

Thanks to his leftist environmental supporters, Horgan has backed himself into a corner.  He now is fighting Alberta, the Canadian federal government in Ottawa and the B.C. Liberal Party opposition.  “We’re seeing the biggest pump prices in B.C. history” noted B.C. Liberal leader Andrew Wilkinson.  “We can’t live with that forever.”

All of this is devastating Canada’s ability to attract investment.  The Liberal federal government of Prime Minister Justin Trudeau strongly backs the Trans Mountain pipeline project, but seems powerless to make it happen.  Canadian Finance Minister Bill Morneau announced that the Federal government would provide financial assurances to anyone building the pipeline, and said that if Kinder Morgan will not go forward there are plenty of other investors who will.  That’s debatable.  Canada is now a slow growth economy.  Its provincial infighting over pipelines is but one example of a business climate unwelcoming to investors.

From an energy perspective, British Columbia is to Canada what New York and New England are to the US.  At least in Canada they don’t have the absurd spectacle of a “Sex and the City” actress so spooking the Governor of New York that he is moving ever further to the left.

Both countries now are staring into the energy abyss.  Increased local control over interstate or interprovincial projects means increased paralysis due to local veto power. New York is finding this out the hard way.

Earlier this month the owners of the Constitution pipeline extended their legal losing streak by failing to get the United States Supreme Court to overrule the Second  Circuit’s decision not to intervene in New York’s rejection of a Section 401 Clean Streams Permit.  In effect, this both killed the project and solidified State ability to block Federally-approved pipelines.

Statewide, New York has gone further.  Since 2014, New York State Court rulings enshrined the right of localities to pass on energy projects. Unfortunately for Cynthia Nixon, those localities are now vetoing “renewable” solar and wind farms.  Ultimate hypocrisy rests in Dryden, near Ithaca, which was a name plaintiff in the case that ended the State’s right to control energy projects.  Last year Dryden blocked a large solar project, claiming that it was too big and being built in the wrong place.  Dryden, they name is NIMBY.

From where, Governor Cuomo or potential Governor Nixon, do you intend to find energy to power New York’s  economy?  The winters get very cold in Upstate New York.  Like the voters in British Columbia who are dealing with massive gas price increases, the voters in New York may love environmental justice warriors now, but wait until the winter.

Questions? Let Dan know.

Marcellus Shale Update – 4.18.2018

It has been nearly two weeks since Judge Musmanno, writing for the Pennsylvania Superior Court, ruled in the case of Briggs v. Southwestern Energy Company that the Pennsylvania “Rule of Capture” does not apply to hydraulic fracturing situations, and confusion still reigns.

For the layman, the law in Pennsylvania regarding oil and gas production has been known as the “Rule of Capture”.  It goes back to the late 1800’s.  This means that whomever has the right to drill for the oil and gas into a pool can do so and “capture” the gas without having to ascertain from where the oil or gas actually originated, or therefore to pay the landowner from where the gas originated any royalty fee.  This is because of the “fugitive nature” of oil and gas which tends to migrate into a pool.

The Superior Court ruled that hydraulic fracturing situations are different.  It said that unlike conventional oil or gas drilling, the oil or gas in hydraulic fracturing situations would stay trapped within the rock for millennia without the purposeful shaking that constitutes the hydraulic fracturing process.  Therefore this activity is more analogous to mining for other static minerals than it is to conventional oil or gas drilling.  As a result, Southwestern Energy, by purposely causing the gas to migrate from the Briggs’s land, can be guilty of a trespass.

Judge Musmanno wrote that “while we are cognizant that establishing the occurrence of a subsurface trespass determining the value of natural gas drained through hydraulic fracturing presents evidentiary difficulties…, we do not believe that such difficulty, by itself, is a sufficient justification for precluding recovery.”

Southwestern already has asked the full Superior Court to reconsider the decision.  This ruling both has some logic to it yet will result in huge problems from a legal and evidentiary standpoint.

The situation calls for action from the Pennsylvania State Legislature to define how this compensation process should work.  That is likely where things are headed.  If so, the industry will face problems as it has cultivated only one side of the aisle.  Those of us who speak to both sides have a huge advantage here, but the industry approach has been to pick a political champion from one side.  We shall see if once again it boomerangs on them.

What makes the industry approach so baffling is that overall it has a good story to tell.  On Friday the Pennsylvania Department of Environmental Protection released data on the soundness of oil well structures.  According to DEP Secretary Patrick McDonnell, the agency’s Mechanical Integrity Assessment Program “is the most rigorous routine well integrity assessment program to protect groundwater in the United States.”  It showed that for 2014, the first year data was collected, less than 1% “of operator observations indicated the types of integrity problems, such as gas outside surface casing, that could allow gas to move beyond the well footprint.”

That is very positive news for the industry.  The question is can they get the news disseminated out here in the Southeast, where we don’t see the wells and don’t hear much good news about hydraulic fracturing.

Finally, I’ve written numerous times about the interstate battles between Pennsylvania, New York, New Jersey and the New England states concerning pipeline construction and access to gas.  You should know that an even nastier fight is happening in Western Canada between the provinces of Alberta and British Columbia.

Alberta is the main oil and gas province in Canada.  It’s western neighbor, British Columbia, is the main environmentally-activist province.  BC has prevented Kinder Morgan from completing a pipeline expansion that would allow KM to expand its Trans Mountain pipeline to bring oil sands bitumen from Northern Alberta to the Pacific coast.  This is infuriating Alberta.  It is threatening to give itself the power to restrict fossil fuel shipments outside of the province, in effect declaring an embargo on BC.  That move would send fuel prices skyrocketing in Vancouver and bring about the Canadian equivalent of a constitutional crisis.

Alberta’s Premier (the equivalent of our Governor) Rachel Notley threatened to implement this provincial legislation, and BC Attorney-General David Eby immediately responded that if he determines the Alberta bill to be unconstitutional his province will sue Alberta.  “If there is anything in this legislation that even suggests the possibility of discrimination against British Columbians, we will take every step necessary to protect the interests of British Columbians because it will be completely illegal.”  Now, neighboring Saskatchewan has joined in, saying it too will embargo BC.  So nasty is this fight that the political fortunes of Canadian Prime Minister Justin Trudeau may hinge on its result.

Stay tuned.  The battle up North may be the precursor to the battle down here.

Questions? Let Dan know.