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A new crude pipeline is crucial to Carney’s ambitions of making Canada an energy superpower
By Brian Platt
Alberta is looking at three options for a new oil pipeline to ship 1 million barrels a day through northern British Columbia, according to people familiar with the matter, as Canadian officials make plans to sharply increase energy exports to Asia.
The provincial government and Prime Minister Mark Carney’s government are also closing in on an agreement on industrial carbon pricing, with a deal expected to be finalized in the next two weeks, said the people, who spoke on condition they not be identified discussing private negotiations.
A new crude pipeline is crucial to Carney’s ambitions of making Canada an energy superpower that’s more relevant in global markets. The prime minister, who’s been in office for a year, has built his economic strategy around the idea of reducing the country’s reliance on the U.S. after U.S. President Donald Trump imposed tariffs that upended the countries’ longstanding free-trade pact.
The pipeline would take years to build, so it’s not a solution to the current energy supply crunch from the standoff in the Middle East. But over the long run, Carney and Alberta Premier Danielle Smith see the opportunity for Canada to increase energy sales to China, South Korea and other buyers. Currently, about 90 per cent of Canada’s oil exports still go to the U.S., despite an increase in shipments to Asia following the expansion of the Trans Mountain pipeline.
There are considerable political and technical obstacles within Canada to a northwest oil pipeline. The idea is opposed by the government of B.C., environmentalists and some Indigenous groups in the region, and it would require Carney’s government to relax a ban on oil tankers.
Some experts advocate a different approach: shipping more oil through the Vancouver region along a similar route to Trans Mountain, which is Canada’s only oil-export pipeline that reaches an ocean port. A report in the Globe and Mail newspaper this week suggested Carney’s government favours that concept.
But Smith, whose government is spending millions on early-stage planning for the new conduit, sees major advantages in going north, said one official with knowledge of the discussions. The three routes include the port city of Prince Rupert and two other spots further north along the coast.
While the premier hasn’t ruled out a southern route, Alberta officials believe it would be significantly more expensive, the person said.
The Trans Mountain project, which opened in 2024 and roughly tripled the capacity of the line to around 900,000 barrels a day, saw huge budget overruns and eventually cost well over $30 billion. A tolling dispute over how much of that cost must be passed onto oil shippers is still the subject of legal wrangling.
There are large stretches along the Trans Mountain route where there’s not enough room to run another large pipeline, according to one person familiar with the deliberations — particularly through the difficult terrain of the Coquihalla region of the B.C. interior.
There are also technical challenges in the Vancouver region. The terminal where Trans Mountain ends has a congested waterway and can only support smaller Aframax-sized oil tankers. The port intends to dredge the inlet to allow vessels to carry more weight.
Running the pipeline to a different terminus in the area, such as Roberts Bank, near the U.S. border, would require crossing agricultural land and the urban environment of the Vancouver suburbs, which may be politically contentious.
“Alberta’s government is evaluating all possible options and routes for a new oil pipeline to Canada’s west coast as we continue to prepare our government’s application,” Sam Blackett, a spokesperson for Smith, said in a statement.
“As the proponent, Alberta is leading the evaluation of all practical routes to ensure the proposal is economically viable, socially responsible, and respectful of First Nations,” he said. The province is aiming for July 1 to submit a proposal to Carney’s Major Projects Office.
Leaders of several First Nations from BC’s northern coastline, including the Haida Nation, traveled to Calgary on Wednesday to warn major pipeline operators that they continue to oppose the construction of a northern pipeline and lifting of the tanker ban.
The group met with senior leadership from Pembina Pipeline Corp. and the federally-owned Trans Mountain Corp. to reiterate their stance, also delivering the message in a letter to Enbridge Inc., South Bow Corp. and TC Energy Corp. Before a route is chosen, it’s not clear what territorial and legal rights those First Nations would have.
Alberta is working on the pipeline proposal but expects to eventually hand it to private sector companies for construction and operation. That likely wouldn’t happen until a route is agreed upon and would depend on Carney’s government designating it as a project in the national interest, making it eligible for faster regulatory approval.
The carbon pricing agreement is essential to finalizing a broader pact on energy signed by Carney and Smith in November. That deal also includes a plan for building a massive carbon capture project to reduce emissions from the heavy-polluting oil sands industry.
Making policy changes to boost development of the energy sector is part of the Carney’s government’s strategy for tamping down separatist sentiments in Alberta.
Canadian Energy Minister Tim Hodgson has declined to weigh in on any potential pipeline routes until the Alberta government’s proposal is ready.
“Let’s not have hypothetical conversations,” he told the Canadian Broadcasting Corp. in a radio interview Tuesday morning.
However, he said the government is committed to ensuring Indigenous communities are on board with any pipeline route that moves forward. “We’ve been clear, we’re not going to build pipelines when there’s not Indigenous support,” Hodgson said.
Charlotte Power, a spokesperson for the minister, said the federal government’s role will be to evaluate Alberta’s proposal based on the five criteria laid out for projects in the national interest, including that they strengthen Canada’s economic sovereignty, contribute to Canada’s climate change objectives and advance the interests of Indigenous people.
“Determination of a potential route and other project elements will be guided through the application and review process,” she said.
With assistance from Jade Khatib and Thomas Seal
Bloomberg.com
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