Summary: Alberta is proposing a southern route for a new oil pipeline from Alberta to Canada’s West Coast, aimed at expanding crude export capacity to Asian markets and reducing reliance on U.S. export routes [1].
The route reportedly starts near Bruderheim, Alberta, and would run toward the southwest coast of British Columbia [5]. Alberta is expected to submit the initial proposal to Ottawa’s Major Projects Office [2].
The project is still preliminary. It has no confirmed private-sector backing yet, according to reporting that cites Prime Minister Mark Carney’s comments [1][6].
CBC reports the estimated cost could be C$35 billion or more, with possible completion between 2032 and 2034 [4].
Key risks: regulatory approval, Indigenous consultation, B.C. political opposition, financing, construction cost inflation, and uncertain long-term oil demand.
Details:
The Alberta government has proposed a southern route for a new oil pipeline to the West Coast, which will be planned and built by the federally owned Trans Mountain Corp., working with Pembina Pipeline Corp. PPL-T +1.66%increase
Prime Minister Mark Carney and Alberta Premier Danielle Smith announced the plan Thursday evening in Calgary. It represented a stark turnaround for the Premier, who had insisted that a conduit to the Pacific should be routed to B.C.’s northern coast.
However, several First Nations in the area had voiced strong opposition to a pipeline in the region. A northern route would have also required changes to thefederal tanker ban along that part of B.C.’s coast, which is considered a non-starter by that province’s government.
That opposition, as well as numerous environmental challenges, prompted Mr. Carney’s Liberal government to persuade Alberta to change tack and consider building a pipeline that largely follows the right-of-way for the Trans Mountain Pipeline from Edmonton to southern B.C.
“We’ve agreed that the best route for a new pipeline is one that already exists: South through the Trans Mountain corridor to our Pacific coast, the gateway to the world’s fastest growing markets,” Mr. Carney said Thursday.
The project is a major component of a push by the federal government to increase exports around the world in the face of a trade war with the United States and make peace with Alberta over resource development.
In a statement, Pembina characterized its involvement as a non-binding agreement with the provincial and federal governments, Trans Mountain and the Alberta Petroleum and Marketing Commission.
The company said its economic interest through construction would be 10 per cent, with the opportunity for up to an additional 10 per cent once the project enters commercial operation. It said Trans Mountain would serve as the lead proponent on the pipeline, responsible for construction, regulatory processes, stakeholder and Indigenous engagement and operation of the asset.
The announcement between Ottawa and Alberta came hours after B.C. struck a deal on a multibillion-dollar federal commitment for infrastructure projects in the province and no change to the federal tanker ban off B.C.’s North Coast.
Premier David Eby said Thursday that the agreement doesn’t obligate B.C. to support an Alberta pipeline proposal. But he said he also knows his province doesn’t have the constitutional ability to stop a pipeline and won’t fight it.
“That’s why this agreement matters,” Mr. Eby said during an event with Mr. Carney in Vancouver. “It ensures that the northern tanker ban stays in place, and it ensures that if a pipeline goes ahead, that British Columbians are fairly compensated for the environmental risks we would take on any new pipeline project.”
The Prime Minister said that Canada and Alberta would be “equal partners” in the pipeline project, and there would be “a meaningful ownership stake for Indigenous communities.”
Alberta and Ottawa have also agreed to overhaul carbon markets, to make “substantial methane reductions” and to new measures to allow power markets to grow “sustainably and affordably,” he said.
Ms. Smith said that after studying northern and southern route options, her government determined that a pipeline from the Alberta town of Bruderheim to a deep-water port terminal on B.C.’s southwest coast offered “the fastest, most cost-effective path to expanding Canada’s energy exports.”
Mr. Carney said the federal government will now refer the West Coast pipeline project proposal to its Major Projects Office, with consultations to begin immediately with Indigenous communities, provinces and territories. He said the government expects the decision on whether it will be a project of national interest will be made by Oct. 1.
Ottawa had said that the industry must build a massive oil sands carbon-capture project, called Pathways, if the pipeline application was to be fast-tracked by the Major Projects Office.
Oil sands developers had been increasingly concerned about the costs of Pathways, saying it would require major public subsidies. However, Mr. Carney and Ms. Smith said the governments had agreed on the terms to launch the project.
“Critically, we’ve agreed the time for action is now,” Mr. Carney said.
Ms. Smith said that discussions with oil sands companies about the Pathways project would continue, particularly around how the sector can expand its production.
An Alberta-Ottawa memorandum of understanding that laid the groundwork for the pipeline plan, signed in November, said Ottawa may consider adjusting a prohibition on tankers loading and unloading oil along the northern B.C. coast.
The northern pipeline route favoured by Alberta would have required overturning the ban.
The long-awaited pipeline announcement came after a flurry of scheduling changes.
The Alberta government had scheduled a news conference about the pipeline proposal for Thursday morning, but late Wednesday it announced without explanation that the event was postponed. In the end, the Prime Minister’s Office and province announced a press conference late Thursday.
Alberta had set itself a deadline of July 1 to file its application for the new pipeline – a date that was included in the MOU that Mr. Carney signed with Ms. Smith on Nov. 27.
The province had initially proposed a series of options for a pipeline route to the North Coast, as well as various ideas for the location of a marine terminal. Ms. Smith had said she preferred such an export point because it afforded shorter sailing time to Asian markets versus the Vancouver area, and it was deep enough to enable access for the large tankers that are favoured for carrying crude long distances.
The Alberta-Ottawa MOU stipulated that any new pipeline would be constructed and financed by the private sector.
Mr. Carney said that Trans Mountain would “plan and construct the pipeline,” working closely with Pembina “who will bring its private-sector expertise and discipline to the construction and operation of the pipeline.”
However, Trans Mountain is a federal Crown corporation, and Ms. Smith said the share of the private-sector stake remains to be seen.
In October, Alberta tapped three energy infrastructure companies – Enbridge Inc., South Bow Corp. and Trans Mountain Corp. – to provide technical and regulatory expertise on its proposal.
Asked during a May interview whether Trans Mountain would consider becoming the project’s proponent, CEO Mark Maki said the federal government has “expressed a strong desire to have a private proponent move the project forward, but they know very well that we’re here and what we’re capable of doing.”
With a report from Tim Kiladze
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