Regina 鈥� The Government of Saskatchewan is putting its money where its mouth is, backing the province of Alberta with similar legislation that would allow this province to cut off British Columbia from fuel exports 聽
On April 23, Energy and Resources Minister Bronwyn Eyre introduced Bill 126,聽The Energy Export Act, for first reading in the Saskatchewan Legislature.
The government said in a news release the bill responds to the inaction by the federal government to assert its jurisdictional authority to ensure the Trans Mountain Expansion Project proceeds. The bill will create the legislative framework necessary to optimize the value of Saskatchewan鈥檚 oil, gas, and refined petroleum products. It establishes a permitting process for individuals or corporations seeking to export such products outside the province.
It does not specifically mention British Columbia, but the reference to the Kinder Morgan Trans Mountain Expansion Project in the affiliated press release made it clear who the legislation is targeted at.
The new legislation will provide a means to advance Saskatchewan鈥檚 key economic interests, including jobs, investment, industry revenue and activity in the energy sector, the government said. It is similar in intent to legislation recently introduced by the Government of Alberta.
鈥淥ur government will always stand up for Saskatchewan and defend the people and businesses that rely on our oil and gas industry,鈥� Eyre said.聽 鈥淚ncreasing pipeline access to tidewater would inject billions of dollars into Canada鈥檚 economy. We are in this gridlock today because, in the 18 months since the federal government approved the Trans Mountain pipeline, it has failed to ensure that construction could proceed. The federal government must ensure its constitutional authority is respected and that the Trans Mountain pipeline gets built.鈥�
Eyre said the government considers Bill 126 a last resort that will be used only if the Trans Mountain pipeline continues to be stalled by provincial obstruction and federal inaction and if the Alberta government acts upon its similar legislation.
鈥淭he expansion of our national pipeline capacity is vital to the future of our energy sector and to thousands of Canadian jobs.聽 It must not be obstructed, either by a lack of federal leadership or by a provincial government that does not have the legal authority to impede a federally-approved project,鈥� Eyre said.
The government said access to overseas markets is critical to getting the world price for Canadian crude oil - and to ending the current supply-demand imbalance that leads to significant discounting of Canadian crude oil in oversupplied North American markets. Lack of access to tidewater costs Saskatchewan oil producers an estimated $2.6 billion and cost the province an estimated $210 million in taxes, royalties and other revenue last year.
Pipelines are acknowledged as the most efficient and the safest method of transporting large volumes of crude oil. The Government of Saskatchewan said it is confident that federally-approved and properly-regulated pipelines can be constructed and operated in a manner that protects both the environment and public health and safety.
Nitty gritty
The fact sheet that came with the press release stated, 鈥淲ith the approval of the Lieutenant Governor in Council, individuals and corporations may be required to apply for an export permit before there is any exporting from Saskatchewan of crude oil, refined petroleum products or other energy goods if the Bill is passed. Permits can be renewed or amended at the minister鈥檚 discretion, in accordance with the Act. More details about the application process will be available once regulations have been developed.
鈥淭erms and conditions are within the discretion of the Minister and can be included on the permit, which could include the method by which crude oil, refined petroleum products or any other energy goods can be exported from Saskatchewan. The permit would include what maximum amounts and daily amounts of crude oil, refined petroleum products or other energy goods can be exported from the province as well as the point at which permit holders can export those products. Different terms and conditions may apply for permits for other types of refined fuels.
鈥淩egulations regarding the Bill could include other fuels, application requirements, circumstances for reconsidering decisions, and fees for both permits and permit renewal.
鈥淚f the act is passed, anyone who fails to comply with the Act, the regulations, a term or condition of a permit or an order of the minister made under the act could be guilty of an offence. In the event a corporation is guilty of an offence, it would be liable to pay a fine of not more than $10 million for each day, or part of a day, on which the offence occurred or continues to occur. Disclaimer: The information in this document is accurate as of April 2018; however, the Government of Saskatchewan accepts no liability for any actions taken as a result of the information contained herein. In the event an individual is guilty of an offence, that person would be liable to pay a fine of not more than $1 million for each day, or part of a day, on which the offence occurred or continues to occur.
The minister could make an order directing an operator cease transporting natural gas, crude oil or refined fuels. However, the definition of an operator appears to be under the provincial Pipelines Act and Railway Act. Interprovincial trade is federally regulated.
The legislation would allow for permits essentially throttling transportation of those products, with the backgrounder saying, 鈥淭he minister could consider issuing a permit for a lesser quantity of gas, crude oil or refined fuels to be imported into and transported through Saskatchewan than has been proposed in the permit application.鈥�
There is a sunset clause that would see the act, if it becomes law, expire Jan. 31, 2019 unless an extension is legislated through amendment.
