VANCOUVER, May 10 (Reuters) - The prospect of a minority Liberal government in British Columbia heightened economic uncertainty on Canada's west coast on Wednesday, pitting the future of key energy projects against the ability of the Liberals to work with the third-party Greens.
While absentee votes still need to be counted in several regions, a process that will take until May 24, preliminary results showed the ruling right-of-centre Liberals squeaked to victory in the vote but lost their majority after 16 years in power as the left-leaning New Democratic Party (NDP) picked up seats.
The legislative minority means the tiny Green party will hold the balance of power as Premier Christy Clark tries to push forward with pipeline expansion plans and a promise to apply a levy to thermal coal exports to the United States in retaliation for U.S. duties on softwood lumber.
Both Clark and Green Party leader Andrew Weaver have said they are open to working with other parties, but the precarious nature of minority governments and an alliance between the energy-friendly Liberals and the environmentalist Greens cast some doubt on the ability to get projects done.
"We don't have experience in Canada with the Greens holding the balance of power, so we just don't know what will happen," said Nelson Wiseman, political science professor at the University of Toronto. "Much will depend on what Christy Clark is willing to offer them."
NDP Leader John Horgan opposes Kinder Morgan Inc's C$7.4 billion ($5.4 billion) Trans Mountain oil pipeline expansion and has also expressed reservations about a $27 billion liquefied natural gas terminal that Malaysia's Petronas wants to build.
The Canadian government in November approved Kinder Morgan's proposal to expand Trans Mountain, which would help ensure oil exports from the oil sands in the neighboring province of Alberta reach Asia. Clark's government gave the green light in January.
With the vote count not complete, the Liberals, which are not linked to Canadian Prime Minister Justin Trudeau's federal Liberal Party, had won 43 seats in the 87-seat provincial legislature. The NDP had 41 and the Green Party three. Forty-four seats are needed for a majority.
The loss of its majority is a big blow for the Liberals, which had campaigned on a track record of strong economic growth and balanced budgets, but had been hobbled by voter anger over unaffordable real estate and environmental concerns.
But the Liberal win spells the likely death knell of thermal coal exports through British Columbia. Clark asked Trudeau to ban thermal coal exports through her province in retaliation for U.S. duties on softwood lumber. Most of the thermal coal exports come from U.S. mines. (Reporting by Nicole Mordant in Vancouver and Andrea Hopkins in Ottawa; Editing by Bernard Orr)