If the project is approved, Alberta intends to seek private capital to own it. — Bloomberg
CALGARY: Alberta will spearhead an effort to build a new oil pipeline to the Pacific coast, a project that would allow Canada to more than double its shipments of crude to Asian markets.
The government of the western Canadian province will act as the proponent of a pipeline to carry as many as one million barrels a day from its vast oil reserves to tankers in British Columbia (BC).
If the project is approved, Alberta intends to seek private capital to own it.
Provincial officials will get technical advice and help from three major Canadian energy operators – Enbridge Inc, South Bow Corp and Trans Mountain Corp –though none of the companies has committed yet to being involved in a pipeline over the long term.
Alberta plans to apply to a new federal government agency for fast-tracking important infrastructure by May.
That would put pressure on Prime Minister Mark Carney’s Liberal government to respond.
Federal regulations and laws implemented under the previous Prime Minister Justin Trudeau’s government, including a ban on tankers off the northern BC coast and a cap on oil and gas emissions, are deterring private sector investors from building a pipeline.
Alberta premier Danielle Smith anticipates laws like the tanker ban could be repealed or subject to carve-outs, she told reporters in Calgary.
“It needed to be kick-started,” Smith said of the pipeline.
“We won’t see a proponent until we have the laws fixed, and so we’re prepared to be the proponent to get it to that point.”
Smith said a meeting in September with the prime minister left her “more optimistic than ever” about Albertans’ concerns being heard.
Carney recently hinted at legal changes which could help a pipeline, but has not promised any, and sees massive carbon capture investments as a “condition” to unlock oil export infrastructure.
A new western pipeline would reduce Canadian oil producers’ reliance on the US market at a time when President Donald Trump is imposing tariffs on his country’s biggest trading partners, including Canada.
Expanding into Asian markets is “the best opportunity for Alberta,” Premier Smith said in a Wednesday interview on Bloomberg Television.
At the same time, she believes a new US Mexico Canada Agreement trade deal – due to be renegotiated next year – will “have us commit to selling more oil and gas to the United States,” she said, citing her good relationship with US ambassador to Canada Pete Hoekstra.
Since his election victory in April, Carney pledged to build infrastructure to reduce Canada’s economic dependence on the United States.
He hired former Trans Mountain chief executive officer Dawn Farrell to lead the government’s new Major Projects Office, established to get projects of “national importance” approved in reasonable time-frames.
Alberta’s effort will involve the creation of an advisory group representing the pipeline companies, Indigenous representatives and oil producers including Cenovus Energy Inc and Vermilion Energy Inc.
Smith added that Alberta would work to help Indigenous groups take equity ownership in a pipeline.
Alberta’s government will contribute C$14mil (US$10mil) to early planning of the line. Smith said a new pipeline could be built in five to 10 years.
Enbridge, which proposed a similar pipeline that was cancelled in 2016, welcomed the province’s effort, but added in a statement that it’s too early to “delve into the details of what this pipeline might look like and who ultimately might be involved if it is advanced.”
Smith has been pressing Carney on the need for additional oil export capacity since the moment he entered office.
Her plan would take the crude to the port town of Prince Rupert, or nearby Kitimat.
Smith didn’t rule out some government ownership but said she’s confident that the pipeline would become a private sector project with the right federal support, and added that she’s not prepared to spend as much as the federal government did on Trans Mountain – about C$34bil. —Bloomberg
