Canada top court rejects bid by British Columbia to regulate oil pipeline

Posted on January 17, 2020


OTTAWA (Reuters) - The Supreme Court of Canada on Thursday quickly dismissed an attempt by the western province of British Columbia to regulate what can be transported in a major crude oil pipeline crossing its territory.

British Columbia wanted the right to require permits for companies shipping oil and other hazardous substances through the Trans Mountain pipeline, which transports oil from neighboring Alberta. Unusually, the top court delivered its decision immediately after hearing arguments.

The Canadian government bought Trans Mountain in 2018 from Kinder Morgan Inc <KMI.N>, intending to carry out its expansion plan that had run into obstacles. The government plans to nearly triple Trans Mountain's flow of crude to 890,000 barrels per day.

Canadian oil producers have been forced to accept deep discounts for their crude because of insufficient pipeline capacity, prompting the Alberta government to order curtailments starting last year.

Alberta Premier Jason Kenney tweeted his approval of the court decision.

The Supreme Court decision ends one challenge against Trans Mountain, but others remain.

A panel of judges on the Federal Court of Appeal last month reserved its decision after hearing arguments from indigenous groups that the Canadian government had failed to properly consult them on expanding its oil pipeline.

The pipeline is under construction and could be in service by mid-2022.


(Reporting by David Ljunggren; additional reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Richard Chang; Editing by Chris Reese and Richard Chang)