ENERGY NORTH: Alberta Premier Expects New Oil Pipeline Proposal Within Weeks

Bloomberg

Alberta Premier Danielle Smith expects a private-sector firm to propose a new oil pipeline to the British Columbia coast within weeks in a bid to become one of the first entrants on the Canadian government’s list of nationally important projects.

Smith said she is in active discussions with major energy companies and that a line to northwest BC “is the most credible and the most economic of all of the pipeline proposals the private sector would consider.” She declined to name which company she expects to bring forward the project.

“I think there will be a private proponent,” Smith said in an interview with Bloomberg News in Calgary. Asked when the proposal would come, she replied: “Probably weeks.”

Pipelines to the west coast have long been at the top of the Canadian energy industry’s wish list because they would reduce producers’ reliance on the US market and allow them to fetch higher prices for their oil. An expansion of the Trans Mountain pipeline that was completed last year has opened the way for Canada to ship larger volumes of crude to markets in Asia, raising and stabilizing local oil prices.

Canada’s House of Commons cleared a bill Friday to accelerate the building of infrastructure such as pipelines and electrical transmission lines. The legislation, known as Bill C-5, allows proposals that are deemed in the “national interest” to receive a quicker review for environmental and other impacts.

The goal of the law is to see major projects approved within two years, creating more certainty for companies before they embark on multibillion-dollar investment plans.

Prime Minister Mark Carney “is going to have his national projects list developing very soon,” Smith said. “So we want to be one of the first ones on it.”

Former Prime Minister Justin Trudeau canceled one coastal pipeline — Enbridge Inc.’s Northern Gateway — after a court halted it amid objections from environmental and Indigenous groups. But US President Donald Trump’s tariffs have revived the idea that Canada should ship more of its vast oil and gas output to ocean ports, and Carney has expressed a willingness to consider new pipelines.

Alberta Oil Is a US Growth Story

US imports of crude oil and petroleum products from Canada

Representatives for Calgary-based Enbridge, the largest publicly traded oil pipeline company in North America, and rival South Bow Corp. did not immediately respond to requests for comment.

Smith has called for a “grand bargain” that would see oil companies build a large carbon capture project in Alberta to reduce the industry’s greenhouse gas emissions, in conjunction with a new pipeline that would generate billions in revenue to help pay for it.

Smith said on Bloomberg Television that she’s “feeling optimistic” she can work with Carney to build more oil export capacity, but added it will have to be a two-part process where both carbon capture and pipelines are proceeding. The governments of Canada and Alberta have agreed to help shoulder some of the costs of carbon capture.

Smith said she hopes all financing for a new oil pipeline would come from the private sector and that governments would not have to provide financial backing, as the federal government did when it bought Trans Mountain and expanded it at a cost of more than C$30 billion ($21.8 billion). The cost surged in part due to delays in the Covid pandemic.

“There were problems with Trans Mountain,” Smith said. “I don’t know if it’s because of extra steps that get taken, or lack of coordination, or subcontractors who think they can overcharge, but I don’t think anybody thinks C$34 billion would’ve happened if that was a private-sector project.”

In January, Smith held a press conference with Enbridge Chief Executive Officer Greg Ebel at which her government pledged to dedicate barrels of oil it acquires from producers to support new pipelines. The province signed a letter of intent with Enbridge and said it would form a working group with the company to evaluate future “market access opportunities” across the Enbridge pipeline network.

The province would offer some support for a new pipeline by pledging to use it to transport oil that it receives as royalties, Smith said.

“If I’m right, then the proponent will come forward, and we’ll back them, and we’ll see whether or not the federal government will accept that,” she said.