Court blocks Alberta’s move to cut off oil flow to British Columbia

CALGARY (Bloomberg) - Alberta’s efforts to punish neighboring British Columbia for opposing a major crude pipeline expansion are on hold, at least for now.

A Canadian federal court on Tuesday blocked an Alberta law that would have allowed the oil-producing province to cut or reduce fossil fuel shipments to its neighbor amid a dispute over the planned expansion of the Trans Mountain Pipeline. The line carries crude and gasoline produced in Alberta’s oil sands to a port near Vancouver.

British Columbia “demonstrated that an embargo of the nature evoked by the members of Alberta’s legislature when debating the Act would cause irreparable harm to the residents of British Columbia,” the court ruled.

The legislation, called the Preserving Canada’s Economic Prosperity Act, was passed in April after the election of a conservative government under Premier Jason Kenney. Defending oil sands developments and pipelines is a central tenet of his premiership.

B.C. leaders oppose the Trans Mountain project while Alberta views the pipeline as essential, given the shortage of export lines that has prompted the government to impose mandatory production limits. The federal government bought the Trans Mountain pipeline last year after Kinder Morgan Inc., the previous owner, threatened to halt the expansion amid B.C. opposition.