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The Alberta government has its own oil to sell because it collects barrels of sandy bitumen in lieu of royalties from some producers under the bitumen royalty-in-kind, or BRIK, program. A take-or-pay agreement commits the province to a minimum shipping requirement. The province sold about 70,000 barrels a day in 2014, according to the most recent data available on the Alberta Petroleum Marketing Commission’s website.

Alberta backed Energy East as essentially an anchor tenant in an effort to get the pipeline off the ground and bring provincial oil to a deep-water port. It pledged to pay to ship 100,000 barrels a day in Energy East, a commitment projected to have a “minimum” government cost of $4.6 billion over 20 years, or a higher figure depending on volumes.

Deep Water

A former Alberta energy minister behind the original Energy East pledge says the idea was to spur a pipeline to the ocean that was deemed critical for the province.

He said supporting Keystone, which would send as much as 830,000 daily barrels of crude to the U.S., is another matter.

“The reason we made the commitment was because it was the most important strategic play available to get us to deep water,” while also replacing foreign oil in Eastern Canadian refineries with domestic crude, said Ken Hughes, a former Progressive Conservative lawmaker. “It had a wide range of benefits, and none of those benefits come about with Keystone.”

Nothing ‘Automatic’

Officials in Notley’s government, including Energy Minister Margaret McCuaig-Boyd, declined to comment on any talks with the company, saying only that the province isn’t liable for any costs related to Energy East’s collapse.