Summer forecast for B.C.: Dry service stations, gas prices of $2 per litre

Summer forecast for B.C.: Dry service stations, gas prices of $2 per litre

British Columbia should prepare for a tumultuous summer as Alberta plans to retaliate against pipeline roadblocks by turning off the taps, says a petroleum industry analyst.

The sudden loss of oil export from Alberta to the west coast would wreak havoc on the B.C. economy, said Dan McTeague, a senior analyst with the website

Already high gas prices would surge beyond $2 per litre and limited supplies would quickly run dry, McTeague said.

"Beyond just the price shock, you would also have some trouble servicing all your gas stations," McTeague said.

"At least half of the stations would be going through rolling blackouts, or at least shutdowns, with stations having no fuel at all for several days."

The Alberta government says it intends to limit exports if B.C. continues to block Kinder Morgan's Trans Mountain pipeline expansion.

Bill 12, introduced by Alberta's NDP government on Monday, gives Energy Minister Marg McCuaig-Boyd wide discretionary power to limit shipments of oil, gas and refined products to B.C.

Kinder Morgan said earlier this month it was halting most work on the project, citing ongoing opposition from the B.C. government. 

'This would be pervasive'

The impact of fuel shortages would spill over into the national economy, McTeague said. It would undercut the value of the Canadian dollar, and send markets into a downturn.

"This would be pervasive," McTeague said. "Your marine system would be affected, the airlines would be impacted.

"Your mining, your forestry, your agriculture industries — all of which rely on fossil fuels like diesel — would be hit hard to the point where there would be significant economic consequences."

If Alberta does retaliate, there would be little recourse for B.C. which is acutely dependent on Alberta oil and lacks the infrastructure to source it from other markets, McTeague said.

"There is no one else out there that is going sell gasoline into this market," he said.  

"You just don't have the logistics or the infrastructure to handle that and storage capacity would also be a challenge.

"This can't be done overnight. It would take several months, if not years of planning, and that's clearly not what would happen in this scenario."

'They are not bluffing'

B.C. Attorney General David Eby told reporters at the B.C. legislature Tuesday that Bill 12 is unconstitutional. He described it as a political bluff and suggested that Alberta has no intention of ever delivering on its threat.

But McTeague said the B.C. government should be taking the threats more seriously. Alberta has no choice but to defend itself, he said. 

"I suspect that Alberta is going to have to make it abundantly clear that they are not bluffing as the attorney general seems to indicate in his press releases," he said.

"I find that disturbing. I'm not sure if they live in an another world, in that part of the political spectrum, but the reality is that this could very well happen and if it does, we all lose."