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Province committing $14 million to support early planning work for a pipeline that would bring one million barrels per day to tidewater
By Meghan Potkins, Steven Wilhelm
Originally published in Calgary Herald Here
Canadian oilpatch executives say they’re prepared to pin their hopes on Alberta Premier Danielle Smith’s Hail Mary bid to land an oil pipeline on Ottawa’s list of major projects this fall.
Smith unveiled plans for Alberta’s government to be the main proponent in an application for an oil pipeline to B.C.’s northwest coast, tapping input from pipeline firms Enbridge Inc., South Bow Corp. and Trans Mountain Corp., as well as Indigenous communities. She hopes to get federal approval as early as November.
The proposal is already facing backlash from First Nations and environmental groups, which argue the project is a “bad bet for taxpayer dollars” and could lead to a “catastrophic oil spill.”
Still, the strategy appears to have the buy-in of a battle-scarred oilpatch, still smarting from a decade of setbacks on pipeline projects like Northern Gateway, Energy East or Keystone XL, all terminated or abandoned amid staunch opposition.
“In the last few decades, (pipeline companies) have lost billions of dollars in investment in pipelines that could not get the regulatory or political gatekeepers to reach final investment decisions,” Alex Pourbaix, executive chair at Cenovus Energy Inc., said Wednesday.
“You can see the scars on me,” Pourbaix told a packed audience of oil and gas executives and political leaders gathered for the announcement in Calgary.
Pourbaix was previously an executive at what is now TC Energy Corp., where he worked on the company’s failed bids to build Energy East and Keystone XL. Now, he’s part of a newly formed advisory group, composed of nine other industry stakeholders and experts — along with pipeline companies Enbridge, South Bow and Trans Mountain — that will begin early planning for the project.
“Canada is facing great challenges with respect to our economy, affordability, housing — you name it — and we have a revenue problem with our country and with our government,” Pourbaix said. “The world right now really needs energy security, and it needs energy affordability.”
The proposed pipeline would move up to one million barrels per day of Alberta oil to the B.C. coast, where it would be shipped to energy-hungry markets in Asia.
Janetta McKenzie, a director at the clean energy think-tank Pembina Institute, called the proposal a “multi-decade gamble,” noting that if a pipeline were profitable, the private sector would have already come forward with a proposal.
“It speaks volumes that after months of pressure from the Alberta government to bring forward a proposal, and offers of concierge service from Ottawa, industry has still refused,” McKenzie said in a statement.
Canada is home to a graveyard of dead pipeline projects. Nine years ago, the Trudeau government effectively killed the Northern Gateway project to the West Coast when it introduced a moratorium on oil tanker traffic on B.C.’s north coast.
Energy East would have shipped Alberta oil to New Brunswick, while Keystone XL would have moved crude to the U.S. Gulf Coast. Each failed for various reasons — former U.S. President Joe Biden cancelled Keystone — but no one has proposed another pipeline since then.
Executives in the oilpatch — and their investors — believed it wasn’t worth the financial risk.
But Alberta’s new strategy to get a pipeline on Ottawa’s short list of major projects has reignited a degree of optimism among wary oilpatch leaders.
“It’s a baby step in the right direction and it’s entirely contingent upon the federal response here,” Colin Gruending, Enbridge’s executive vice-president in charge of liquids pipelines, said.
“But it’s the most optimistic I’ve felt in 10 or 11 years.”
Smith has been working to revive a pipeline project, arguing Ottawa must scrap a slew of federal policies she believes have been holding investment back, including a law that bans oil tankers on the northern B.C. coast.
“It would be optimal if a pipeline proponent had a clear path to being able to get a project approved without the need to partner with government, but that’s not the world we live in,” she said.
Still, some First Nations in B.C. remain opposed to any project that would bring crude oil tankers to the coast.
“We must inform Premier Smith once again that there is no support from Coastal First Nations for a pipeline and oil tankers project in our coastal waters.” Marilyn Slett, president of Coastal First Nations, Great Bear Initiative, and elected Chief of the Heiltsuk Nation, said in an email.
The premier said Alberta will spend $14 million towards work on a proposal, including cost estimates and engagement with Indigenous communities in Alberta and B.C., among other groups.
Provincial officials said they expect to submit the proposal to Ottawa’s Major Projects Office by May 2026. Smith added she hopes a pipeline could be included in the next batch of Ottawa’s nation-building infrastructure projects as early as November — enabling a potential private sector proponent to come forward by the spring.
“What stands before us right now is a once-in-a-generation opportunity to unlock our wealth of resources and become a world-leading energy superpower, creating lasting prosperity for generations to come,” Smith said.
Pourbaix says that after years of efforts and billions of dollars going to waste, no pipeline companies would fund a pipeline in Canada.
“Industry told the Prime Minister and the federal government exactly that. The response from the federal government has been clear — they would only consider changes when asked by a proponent,” Pourbaix said.
The province will remain involved in the pipeline until federal approval, at which point a private sector proponent is expected to come forward.
“I just have confidence that if we fix the investment climate and get an agreement with the federal government to move forward on this on the major project list, proponents will step up and it will be built with private sector money,” Smith said.
Enbridge, South Bow and Trans Mountain have not contributed any funding to the proposal, but will provide advice and technical support, according to Larry Kaumeyer, Alberta’s deputy minister of energy.
A number of executives who attended Wednesday’s meeting emphasized significant hurdles remain for a pipeline project, including a necessary but potentially controversial recalibration of federal legislation and the strong likelihood the project will face challenges in court.
But Hal Kvisle, chairman of ARC Resources Ltd., who has also been appointed to sit on Alberta’s new technical advisory panel, said he felt encouraged by what he has heard so far from the new Liberal government.
“I have had a number of conversations with (Prime Minister Mark Carney) and he is genuinely supportive,” Kvisle said.
He doesn’t say, ‘why would you want to build this pipeline?’ Kvisle said. “He said, ‘what has to happen in order for it to go ahead?’ Now that’s a very different question than the one I was getting from Minister Guilbeault, Minister Freeland and Prime Minister Trudeau.”
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