PIPELINE SUMMER – Natural Gas and Oilsands – A Power Combo for Energy Security Gets Pipeline Promises

 

By Maureen McCall

The summer of 2026 may go down in history as “pipeline summer” due to the large number of plans for new pipelines or expansions.

It started with a hopeful spring. In April, the federal government announced approval of Enbridge Inc.’s $4-billion Sunrise natural gas pipeline project in British Columbia. By May, not only did Prime Minister Mark Carney and Alberta Premier Danielle Smith announce the MOU Implementation Agreement, moving a West Coast Oil Pipeline forward, but by early July, a southern route was chosen with Delta B.C.’s Roberts Bank proposed as the new pipeline terminal/port. By August 4^th, the project was designated “in the national interest” under the Building Canada Act, allowing the federal government to fast-track approvals. Not to be outdone, also in July, Ontario Premier Doug Ford announced the Northern Shield Energy Corridor route for a pipeline to carry 500,000 barrels of Alberta crude to refineries in southwestern Ontario. By July 20^th, ATCO Energy’s 146-mile, $2.9 billion Yellowhead Gas Pipeline was approved by the Alberta Utilities Commission.

The language in pipeline discussions has changed with the proposed oil and gas emissions cap discarded, the Clean Electricity Regulations placed in abeyance in Alberta while a court challenge proceeds, and the Major Projects Office moving to get selected developments through the approval process more quickly.

So in “Pipeline Summer”, Canada has had a ton of optimistic announcements and is rising to take its place as an energy powerhouse in a year with far too many “black swan events”, where the closure of the Strait of Hormuz has choked off 20% of global oil supply.

Indeed, the economics of energy security have been dramatically changed- some say irreparably. Still, with all the interconnectivity in global systems managing demand, sourcing and refining levels, the concerns that remain favour Canadian production.

Speaking on a panel at the recent Pacific Northwest Economic Region’s 2026 conference (PNWER) Kendall Dilling, President of Oil Sands Alliance, identified key factors.

“It still comes down to the same question,” Dilling said. “Where do you want to get your oil and gas from? And where do you want your allies getting it from? And all of this speaks to North America’s incredibly fortunate situation right now. Canada and the U.S. are both big exporters of natural gas and oil, and from a geopolitical perspective, are viewed as very low risk. The second rationale is: I have a choice. I have a choice from lots of places in the world to get oil and gas. Where do I want that to be? And in a growing world of allies and allegiances and hemispheric influence, it’s compellingly in both the United States and Canada’s interest to provide those resources not just for their own needs but for those of their allies as well.”

Pipelines- a Twenty-Five year bet?

Energy security now matters more than ever, which has set Canada up for this rush of pipeline announcements. But the emerging challenge is how are we going to fill all of them? The panellists at the PNWER event, which included Hon. Brian Jean, Government of Alberta, Minister of Energy and Minerals and moderator Heather Exner-Pirot, Director, Macdonald-Laurier Institute, agreed it is widely recognized that when a pipeline is built – it is a 25-year bet that there is going to be a market and a customer for its product. So Canada is, in essence, making very long-term bets on the announced projects in a time of great volatility.  Beyond the challenge of passing regulatory approvals, companies face the challenge of ensuring that the pipelines are commercially viable and have sufficient supply to support them over the long term.

Erin Rolstad, VP Regulatory & Mainline Commercial Strategy at Enbridge, viewed pipelines as the solution to the bigger challenge of the Western Canadian Select  (WCS)  differential. According to albertaoil.ca, WCS currently trades at a $16.00 discount to WTI, representing a 19.5% differential. The spread reflects transportation costs, quality differences, and most importantly, market access constraints.

“There are only two options,” Rolstad said. “You either have too much pipeline and not enough oil, or too much oil and not enough pipeline. So, out of the two choices, I’d rather have too much pipeline. I predict that in 20 years, when we’re worried about filling another pipe, we’ll have a bigger reservoir, bigger reserve status here in Alberta than we have today. I think we’re finding more gas and oil all the time. So as far as filling, we’ll have enough product to fill it. We just have to make sure that we have enough pipeline so that we’re not where we were before, which is a differential that’s blown out and frankly not getting proper value for our oil.”

The panellists generally agreed that finding several million barrels of oil per day was an achievable target and a much better challenge to have than the current situation of lack of egress. Many producers over the last decade have been struggling with the challenges of stagnation, and now potentially will be faced with the challenges of growth.

Politics comes and goes, but ultimately market dynamics and economics win.

There seems to be a national consensus around the critical importance of natural resources in Canada and in the U.S., with support for pipelines and provinces working with each other and with the federal government. However, it’s not strictly regulatory and political actions that have held up big infrastructure projects. It may still be challenging to get investor interest due to the current volatility in crude oil markets.

Enverus Intelligence Research (EIR) characterizes Canadian oil sands as a highly economic and growing resource and projects that Western Canada Sedimentary Basin (WCSB) oil production can grow by ~1 MMbbl/d over the next seven years, primarily driven by Steam-Assisted Gravity Drainage (SAGD) development, but cautions that more pipeline capacity will be needed by the early 2030s. Oilsands have a 10-year investment cycle, and certainly Canada takes up to 10 years to approve and build pipelines, which prompts some investors to question whether the investment is a bet on today’s market conditions while there is no way to know what conditions will be like down the road.

The solution seems to be for governments to recognize investor concerns and adopt attractive measures. Tax competitiveness is one good example. Adam Legge, President, Business Council of Alberta, mentioned on a previous panel that the U.S. big, beautiful bill was really aggressive in terms of capital write-off for depreciation for capital projects across a broad range of sectors, and Canada should develop a similar incentive. Without a similar approach, Canada has a competitive disadvantage.

“That’s government’s role to level the playing field, the taxation and the fiscal take from these projects,”  Kendall Dilling said. “The reward for doing that is billions. This value proposition we’re talking about of building pipelines, building the production to fill it, and doing carbon capture and storage…this is conservatively several hundred billion in investment, and the economic benefits associated with that investment, the job creation and more so far outweigh governments being a little bit patient in taking their economic rent out of the resource. You’ve got to give the developer a chance to recover their initial capital, and then there’s lots of resource to go around to pay royalties and taxes and provide jobs and build schools and roads and hospitals and all that stuff we collectively value. But you got to get those upfront investment conditions right, or these projects can’t proceed.”

Minister Brian Jean spoke of the Alberta government’s strategies to leverage natural gas reserves – looking at infrastructure plays like pipelines, or even powering data centers and converting natural gas to data -exporting it in a different form. Ironically, the unrecognized story about the oilsands is how integrated natural gas liquids (NGLs) are with heavy oil production. Not a lot of people are aware of how heavy oil is difficult to move through a pipeline. Diluent needs to be added to move the oil, and it is produced with NGL production. As Canadian companies look at adding more oil to pipelines going off the West Coast, the diluent that is put into the pipeline does not come back to be reused. So there will be a real increase in NGL demand as we look at more crude oil exports. Hence the Natural Gas- Oilsands power combo.

In all, Canada has a great energy security story that needs telling. More communication about our strengths will lead to mutual investments and opportunities between ourselves and our partners, whether they be provincial and federal/state level, or through industry with government. As Kendal Dilling commented…

“The nice thing about pipelines is every direction is a good direction.”

---

Maureen McCall is an energy professional who writes on issues affecting the energy industry.

Share This:

---

More News Articles