"Albertans have the right to choose how our energy is shipped, so that Alberta gets the best return possible", Notley said Wednesday.
Entitled "Preserving Canada's Economic Prosperity Act" and officially known as Bill 12, the government said the goal of the bill is meant to give the province the power it needs to to restrict the export of crude oil, natural gas and refined fuels into BC.
"Instead of asking how can we work together on this, they took aggressive action", he said in Chilliwack, B.C.
"In the absence of such a commitment", Eby wrote, "I intend to instruct counsel to bring an action challenging its constitutional validity in the courts of Alberta".
Brian Ahearn, vice-president in Western Canada for the Canadian Fuels Association, said up to 100,000 barrels per day of refined products including gasoline, diesel and jet fuel flow from Alberta to B.C. every day - by pipeline, rail and truck - making up 50 to 60 per cent of B.C.'s total refined fuel consumption.
Eby said that unless Alberta asks a court to weigh in on the legislation's legality, B.C. will launch its own lawsuit in an Alberta courtroom to do it for them. Alberta has argued the move was unconstitutional and that it is simply defending its interests.
Notley has been at odds with Horgan since late January, when the BC government announced its plans to introduce legislation that, if successfully passed, would give it the power to restrict the amount of bitumen that flows to the province's shores - essentially halting the Trans Mountain Pipeline in its tracks.
Notley said Alberta oil sells at a discount because of tight pipeline capacity and because most of it goes to the United States.
The project is facing challenges in three levels of court from the B.C. government, environmental organizations, First Nations and municipal governments.
Earlier Wednesday, federal Finance Minister Bill Morneau said those talks continue.
The federal government is willing to "provide indemnity" to any investors, be they the project's original architects or otherwise, to ensure the controversial project is able to proceed, Morneau told reporters in Ottawa.
The bill echoes similar legislation passed by Alberta in the early 1980s in a fight with Ottawa over oil resources and profits.
If the impasse is not resolved soon, Notley said she is willing to take the next step.