Alberta has passed landmark legislation giving it sweeping power to intervene in oil and gas exports that could result in punitive price spikes in British Columbia in the dispute over the Trans Mountain oil pipeline expansion.
Premier Rachel Notley won’t say when and how the power will be used, but said she won’t wait long.
“Alberta will be equipped with new tools to assert our rights to control the flow of our resources to British Columbia,” Notley said Wednesday prior to Bill 12 passing third and final reading.
“Albertans, British Columbians and all Canadians should understand that if the path forward for the pipeline through B.C. is not settled soon, I’m ready and prepared to turn off the taps.”
Watch below: Alberta Premier Rachel Notley said her NDP government is prepared to turn off the taps over the Trans Mountain pipeline dispute.
The bill would give Alberta the power to intervene in the energy market, to decide how much fuel is sent and by what means, be it by rail or pipeline.
B.C. Premier John Horgan called the Alberta law provocative.
“Instead of asking how can we work together on this, they took aggressive action,” he said in Chilliwack, B.C.
Watch below: John Horgan said it was an “unprecedented day” on Wednesday, calling comments by Kinder Morgan and the federal government “provocative” and labelling Alberta legislation to turn off the taps as “unconstitutional.”
Cutting oil flow to B.C. is expected to cause price spikes in gas at the pumps along with other related fuel fees.
But Notley said it’s justified legislation, given that Alberta is losing billions of dollars due to transportation bottlenecks and the fact that B.C. is frustrating the federally approved Trans Mountain project.
“With pipeline capacity stretched to the limit, Albertans have the right to choose how our energy is shipped,” said Notley.
“Alberta has the right to act in the public interest.”
The Trans Mountain expansion would triple the amount of oil flowing from Alberta to tankers on the B.C. coast.
Notley said Alberta oil sells at a discount because of tight pipeline capacity and because most of it goes to the United States. A better price could be fetched on overseas markets.
The $7.4-billion project was approved by Prime Minister Justin Trudeau’s government in 2016, but since then has been hamstrung by permit delays and court challenges in B.C.
Horgan has said his government remains concerned about the effects of spills on the inland waterways and coastline.
The pipeline owner, Texas-based Kinder Morgan, has scaled back spending on the line and has given Trudeau’s government until May 31 to show that there is a way to complete it.
The Alberta and federal governments have committed to backstopping the project with public dollars if that’s what it takes to make sure it’s completed.
Earlier Wednesday, federal Finance Minister Bill Morneau said those talks continue. He said if Kinder Morgan wants to abandon the expansion, there are plenty of other investors willing to step up.
Notley’s bill echoes similar legislation passed in Alberta a generation ago in the early 1980s in a dispute with Ottawa over oil ownership and pricing.
The price of the North American oil benchmark briefly touched $72 US a barrel late Tuesday despite the OPEC oil cartel publicly mulling boosting supply as soon as next month.
The price of West Texas Intermediate, the North American oil benchmark commonly known as WTI, was changing hands as high as $72.83 at one point on Tuesday. Although it slumped slightly lower on Wednesday, that was the highest level since November 2014.
Last month, the cartel reported 166 per cent compliance to its own cut targets — meaning it has been pumping even less oil than it had planned to.
But speaking to a Reuters reporter on Tuesday, one unnamed OPEC source said the group is considering lifting those limits sooner than anticipated, in part because of the rising price of oil.
While WTI was briefly at $72 US, Canadian oil companies have also seen their prices rise. The blend of oil from Alberta's oilsands is known as Western Canada Select and it, too, has risen to a more than three-year high, almost touching $58 U.S. on Tuesday.
Higher oil prices are doubly helpful for Canadian producers, because they are priced in U.S. dollars, while Canadian companies book most of their expenses in Canadian dollars.
In Canadian terms, WTI is currently trading as high as $91 a barrel, Bank of Montreal economist Doug Porter noted on Tuesday.
"That's up 50 per cent from just eight months ago."
In Canadian dollar terms, the price of WTI is now where it was, on average, during what Porter called the "go-go years for oil prices," between 2007 and 2014.
"The lack of a currency response means that Canadian consumers are feeling the full impact of higher oil prices," he said.
Comcast Corp confirmed for the first time on Wednesday it was preparing a higher, all-cash offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co.
While the U.S. cable operator said it was still considering its position, it said it was in advanced stages of readying an offer that would be “superior” and “at a premium” to Disney’s all stock offer.
“While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced,” Comcast said.
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Sources familiar with the deal told Reuters at the start of May that Comcast was preparing bridge financing for a cash offer for the Fox assets, but Wednesday’s statement is the first formal confirmation by the company it is ready to move.
The same sources said Comcast Chief Executive Brian Roberts will only proceed with a bid if a federal judge next month allows AT&T Inc’s planned $85 billion acquisition of Time Warner Inc to proceed.
Disney in December offered stock then worth $52.4 billion to buy Fox’s film, television and international businesses as it bids to beef up its offering against streaming rivals Netflix Inc and Amazon.com Inc.
Disney shares have fallen nearly 3.3 percent since, reducing the value of the offer to just over $50 billion.
“It all depends on the AT&T and Time Warner deal,” said Brian Weiser, analyst at Pivotal Research. “If that goes through it is highly possible there will more than one bid for Fox.”
Fox and Disney were not immediately available for comment.
Comcast, owner of NBC and Universal Pictures, has also made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.
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A regulatory filing in April showed Comcast offered to acquire most of Fox’s assets in an all-stock deal valued at $34.41 per share, or $64 billion last November – just before Disney’s offer was agreed.
After a sale, Fox’s remaining assets will include Fox News, Fox Business Network and sports cable networks.
Comcast shares were down 2 percent at $31.83 while Disney was down 0.7 percent at $103.26 in premarket trading.
“I think Fox, or its controlling shareholder and Board of Directors, has already expressed their preference – Disney, even though Comcast allegedly offered a higher consideration already,” said Jeffrey Logsdon, an analyst with JBL Advisors in California.
“Comcast does seem intent on winning this one (and) rivalry can frequently drive prices to un-economic levels.”
PHILADELPHIA — Comcast may make an offer for Twenty-First Century Fox, potentially putting it in a head-to-head bidding war with Disney.
Comcast Corp. on Wednesday did not provide specific details on a bid, other than to say that it would be all cash and at a premium to the value of Disney’s current all-stock offer.
The Wall Street Journal and others reported earlier this month that Comcast had $60 billion to challenge Disney.
Disney’s $52.4 billion bid would go a long way in allowing it to better compete with technology companies in the entertainment business. Any tie-up would put in its stable more Marvel superheros, as well as the studios that produced the Avatar movies, “The Simpsons” and “Modern Family.” Disney would control Fox’s cable and international TV businesses as well.
Comcast said Wednesday that it’s in the “advanced stages” of preparing its bid. The Philadelphia company said the structure and terms of its offer would be at least as favourable as Disney’s.
A potential transaction with either Disney or Comcast would not include the Fox News Channel, Fox Business Network, Fox Broadcasting Company and certain other assets.
Comcast’s stock fell 2 per cent in premarket trading, while shares of the Walt Disney Co., based in Burbank, California, dipped slightly.