VANCOUVER – The premiers of British Columbia and Alberta say they’re prepared to work through some of the differences that stand in the way of the proposed Enbridge (TSX:ENB) Northern Gateway pipeline, but they’ve effectively agreed to drop the most contentious issue: B.C.’s demand for a share of the revenue associated with the project.
B.C. Premier Christy Clark and Alberta Premier Alison Redford have had an uneasy relationship since Clark outlined five conditions to win her support for the controversial pipeline, including a “fair share” of the project’s economic benefits.
When Clark outlined her demands last year, the request for financial compensation drew an immediate rebuke from Redford, who accused B.C. of attempting to reach into Alberta’s pockets. Clark famously described a meeting between the two leaders as “frosty.”
But Tuesday’s so-called “framework” for pipeline negotiations makes it clear that money will not be part of the talks between the provinces. Instead, B.C. agreed to take demands for financial compensation directly to the oil and gas industry.
Clark rejected the suggestion she had backed down from one of her key conditions, which she has always insisted were firm.
“I have always recognized we don’t know what form the economic benefit for British Columbia could take,” she said.
“It could take a whole number of different forms.”
Clark had previously refused to sign onto Redford’s push for a national energy strategy because of the dispute. On Tuesday, Clark agreed to endorse the national plan.
Redford suggested their announcement brings the provinces closer to an ultimate agreement on the pipeline.
“After all of the discussions that we’ve had, to be able to take a look at those five conditions and know that in each of those areas there is the possibility of good progress,” she said.
“We’re making good progress all the way along.”
Clark has long resisted taking a clear position on the controversial pipeline, but last year outlined five preconditions for her support. The first four focused on spill response, environmental protection and consultation with First Nations.
However, her insistence that B.C. receive compensation appeared to present the largest political barrier, with each premier suggesting there was no room for negotiation.
Clark had previously ruled out going directly to the oil and gas industry to ask for money, saying last October that “the people who have the most vital interest in having it go ahead are the ones that are going to have to decide to move it forward.”
In fact, Enbridge said last year that it offered to meet with Clark to discuss the benefits of the pipeline, but she declined the offer. A spokesman in the premier’s office said at the time that it would be inappropriate for her to meet with Enbridge officials until the ongoing environmental review was complete.
Earlier this year, it appeared the feud between the two premiers was calming.
Clark and Redford met in Kelowna in June, while Clark was running in a byelection, and announced a working group to collaborate on shared economic interests. During the meeting, they waxed about shared goals such as opening new export markets and declared their provinces “best friends,” though they avoided talking about the pipeline.
The proposed 1,177-kilometre Northern Gateway pipeline would deliver 525,000 barrels of Alberta oil to a tanker terminal in Kitimat, on the north coast of B.C. It has faced opposition on a number of fronts in B.C., including from First Nations, environmentalists and the province’s NDP opposition.
The project is currently undergoing a joint environment assessment review. That panel has until the end of 2013 to complete its report and recommendations.
In addition to the Enbridge project, Kinder Morgan has proposed its own $4.1-billion Trans Mountain project that would expand an existing pipeline from Alberta to the Vancouver area. Clark has said her five conditions would also apply to that project, or any other that involves heavy oil from Alberta.