CASE STUDY

Mini Case: Conflict Escalation between Neighbours

Since 1953, the Kinder Morgan Trans Mountain Pipeline has transported crude and refined oil from Alberta to the west coast of British Columbia, which gets approximately 90 percent of its gasoline from that pipeline. In 2013, Kinder Morgan applied to build a second, larger pipeline, running parallel to the first, at an estimated cost of $7.4 billion. Alberta sees the pipeline as critical to its economic future, but in early 2016, British Columbia's NDP government said that it did not support the pipeline, partly due to environmental risks associated with oil spills. In late 2016, the federal government approved the Kinder Morgan expansion project, and assured Canadians that the approval was "subiect to 157 binding conditions that will address potential Indigenous, socioeconomic and environmental impacts, including project engineering, safety and emergency preparedness.

In January 2018, British Columbia announced that oil imports from Alberta should be restricted until a study could be completed on the environmental impact of a potential spill. Alberta's premier (a member of the ND) called the announcement a "stall tactic" and retaliated by blocking imports of wine from British Columbia.

These sanctions were lifted two weeks later. Both governments have appealed to the federal government for assistance, and both governments have filed lawsuits in federal court. The federal government has referred the provinces to dispute mediation while those lawsuits progress.

In April 2018, Kinder Morgan suspended "non-essential" pipeline activities because British Columbia's continued opposition was putting shareholder resources at risk. Alberta responded by proposing to restrict the amount of crude oil, natural gas, and refined fuel being sent to British Columbia, essentially cutting off that province's gas supply, and Mayor of Calgary Naheed Nenshi criticized the British Columbia premier, saying, "It's very clear that Mr. Horgan, who I think is one of the worst politicians that we have seen in Canada in decades, appeals to populism in a way that is not based on fact." What started as a legitimate conflict between competing interests has become a bitter dispute between Alberta and British Columbia, between Canada's NDP leaders, and between provincial and federal governments

In late May 2018, the federal government bought the Trans Mountain pipeline from Kinder Morgan for $4.5 billion. The government has stated that it does not plan to be a long-term owner of the pipeline, and is in negotiations with investors, including Indigenous communities, pension funds, and the Alberta government to sell the pipeline once it has been completed.

QUESTIONS:

1. Describe the organizational sources of conflict described in this case.
2. Is this conflict zero-sum? Can it be framed as a win-win?
3. Describe several ineffective conflict management techniques that have been used in this instance.