Court Suspends Alberta Law Curbing Oil Flow to British Columbia

CALGARY, Alberta (Reuters) - A Canadian court on Tuesday granted a temporary injunction against legislation enabling the province of Alberta to restrict the flow of oil and gas to neighbouring British Columbia.

Alberta enacted Bill 12, dubbed the "turn off the taps act" in May, after it was passed by the previous provincial government in retaliation for British Columbia opposing the expansion of the Trans Mountain oil pipeline.

Bill 12, formally known as the "Preserving Canada's Economic Prosperity Act", has yet to be used to cut oil and gas shipments. However, Alberta Premier Jason Kenney said it would provide leverage in discussions with British Columbia counterpart John Horgan.

British Columbia's lawyers filed court actions against Bill 12 and on Tuesday the federal court said the province had met the criteria for a temporary injunction by showing the legislation would cause harm to its residents.

"The Court rejected Alberta's argument that this harm is speculative, finding that it was reasonably certain and noted that whether or not the harm is triggered lies entirely within Alberta's discretion," the court said in its ruling.

The trial will continue at a future date.

The Trans Mountain expansion project, which would nearly triple the flow of crude from Alberta's oil sands to British Columbia's coast, has been an ongoing source of disagreement between Canada's two westernmost provinces.

Entrenched environmental opposition and regulatory delays have held up the project for years and court challenges are ongoing despite the federal government buying the pipeline last year for C$4.5 billion to help to facilitate construction.

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