EDMONTON, Alberta, May 17 (Reuters) - Nearly 100 British Columbia business, labor and aboriginal leaders went to Edmonton in Alberta on Thursday to show support for an oil pipeline expansion stalled by opposition from environmentalists, other aboriginals and the B.C. government.
British Columbia and Alberta have been at war over Kinder Morgan Canada Ltd's Trans Mountain project for months. B.C.'s government has pledged restrictive new environmental rules to block the project. Alberta, home of Canada's energy heartland and a supporter of the pipeline, responded with a B.C. wine ban and new laws aimed at cutting off the western province's fuel supplies.
In April, Kinder Morgan halted all non-essential work on the C$7.4 billion ($5.8 billion) expansion, which would nearly triple capacity on an existing line from Edmonton to the Vancouver area, citing the vehement opposition in B.C.
Clad in red "Canada" scarves and yellow "I support Trans Mountain" pins, the delegates presented a different picture to Alberta's business community.
"The wine ban has been suspended," Alberta Premier Rachel Notley said to laughter over a lunch of steak and B.C. wine, though she was quick to note the economic impact of Canada's lack of exports outside of the United States.
"Every single day that goes by without the Trans Mountain expansion means more revenue evaporates from Alberta and Canada and reappears south of our border," she said, pegging that cost to Canada at C$40 million a day.
Oil prices climbed above $80 for the first time since 2014 on Thursday, prompting renewed optimism from energy producers around the world. But Canadian oil trades at a steep discount to the U.S. benchmark, made worse in recent months as rising output ran up against transportation bottlenecks.
The discount has producers desperate for new pipelines, though getting one built has proven tough. Two lines that would have moved Canadian crude to coastal ports for export have been canceled in recent years, and now Trans Mountain is on hold.
Both Alberta and Ottawa have pledged financial support, and Canada's finance minister on Thursday highlighted the country’s pension funds as possible investors to help revive the project.
With the expansion in limbo for now, the companies and communities who benefit from its construction say work on the ground has ground to a halt and they worry it may not come back.
"We're struggling a little bit right now," said Keith Matthews, a business owner and former chief of the Simpcw First Nation, 435 km (270 miles) northeast of Vancouver. "(If the project doesn't happen) none of our benefits are realized." ($1 = 1.2828 Canadian dollars) (Reporting by Julie Gordon in Vancouver; Editing by Lisa Shumaker)