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CALGARY — British Columbia’s incoming Conservative government could bring Alberta and its western neighbour into closer alignment on energy development, pipelines and access to Pacific markets after years of political friction between the provinces.
RJ Johnston, director of Energy and Natural Resources at the University of Calgary School of Public Policy, says the most immediate change is likely to come on oil policy, where premier-elect Lorne Doerkson’s Conservatives have expressed support for both the proposed Pacific Link pipeline and lifting the federal oil tanker moratorium.
“I think it’s interesting that the new government is supporting lifting the tanker ban and also supporting the Pacific Link pipeline, that’s certainly a big change,” Johnston said in an interview with Harvard Media. “There has been alignment on the natural gas side, but all the changes in oil sands are definitely a positive for Alberta.”
The shift follows nine years of NDP government in British Columbia, a period that included significant disputes with Alberta over oil transportation and pipeline development.
Johnston said the new government could reduce one source of political uncertainty around future energy projects, although provincial support alone will not eliminate the regulatory, legal and Indigenous consultation challenges facing major infrastructure proposals.
He said the next phase of projects such as Pacific Link will depend heavily on consultation and accommodation with affected First Nations.
“It’s important that Ottawa, Alberta and BC, all work together to sort of have a process that involves consultation and accommodation where possible and sharing economic benefits in order to sort of minimize and reduce the risk of legal challenge,” Johnston said.
He said legal challenges remain possible even where governments support a project, but believes the experience of the Trans Mountain expansion has created a more established process for consultation and shown major energy infrastructure can generate economic returns.
Johnston said the broader political environment has also changed as Canada looks for ways to diversify trade away from heavy dependence on the United States.
He said projects such as Trans Mountain and LNG Canada reaching completion have helped demonstrate the economic value of connecting Western Canadian resources with overseas markets.
Johnston said market diversification makes economic sense regardless of the state of Canada-U.S. relations.
“It’s hard to see why market diversification would be a bad thing under any circumstances in almost any industry,” he said.
He said the United States remains an important customer for Canadian energy, but concentrating exports in a single market creates risk, while Asia-Pacific markets offer additional growth opportunities and refining capacity capable of processing heavier Canadian crude.
Johnston said infrastructure will ultimately determine how much of that opportunity Western Canada can capture.
He pointed to pipelines, railways, ports, roads and electricity infrastructure as critical to moving oil, natural gas, uranium, potash and other Western Canadian resources to market.
“If there’s one single thing that industry is looking for more than anything, it’s infrastructure,” Johnston said. “The potash and uranium and oil sands and gas and, gas liquids and everything else are only as good as their ability to get into the market.”
He said the incoming B.C. government appears more receptive to that type of infrastructure development, potentially adding another level of political alignment between British Columbia, Alberta and Ottawa.
Johnston described the current environment as one of the strongest periods of federal-provincial alignment in years, with commodity markets also supporting further development.
“I’m pretty constructive,” he said. “I think that you have the highest sort of federal provincial alignment that we’ve had in quite a long time.”
Johnston said the question now is whether that political momentum translates into investment decisions, new infrastructure and increased production.
Doerkson has pledged to “super-charge” British Columbia’s economy following the Conservative majority victory, while Prime Minister Mark Carney and the premier-elect have also discussed opportunities for economic development and co-operation.
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