Alberta to draw up proposal for new oil pipeline to B.C. coast by May

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The Alberta government is taking the lead on an application for a major new oil pipeline to the B.C. coast in an attempt to break through several federal policies that Premier Danielle Smith has blamed for scaring away private investors.

The idea is to hammer out a proposal for a one-million-barrel-a-day bitumen pipeline. The proposal would be sent to Ottawa’s new Major Projects Office by May, 2026, the government said on Wednesday.

Alberta does not want to be the financial backer, but hopes the project will be deemed in the national interest after a fast-track review by the federal office, then ultimately built and owned by private sector and Indigenous interests.

The announcement confirmed an earlier report by The Globe and Mail.

The move is the latest effort by the province to advance the interests of the oil and gas industry. Both the industry and the province have frequently accused the federal government of restricting the sector’s financial prospects with onerous environmental policies, and have called for them to be rescinded.

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In recent months, the sides seem to have moved closer, as the government of Prime Minister Mark Carney has appeared more receptive to positioning Canada as a conventional and clean-energy superpower amid the trade war with the United States.

One way the federal government has sought to increase trade independence from the U.S. is through Bill C-5, which authorizes it to fast-track certain projects it deems to be in the national interest. An initial list of those projects, which was referred to the Major Projects Office last month, did not include a pipeline.

Alberta hasn’t finalized a route or a cost estimate for the project, but is proposing a 42-inch-diameter pipeline, extending to either Prince Rupert or Kitimat, B.C., from Alberta. It has started engaging with First Nations that could be affected and is also discussing the concept with the B.C. government, which has not been supportive of a new oil pipeline.

Alberta has enlisted Enbridge Inc. ENB-T, South Bow Corp. SOBO-T and Trans Mountain Corp. to provide technical and regulatory expertise, though they are not financially backing the project.

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However, they can offer the benefit of their experience with such projects as Northern Gateway and Energy East, which failed to get built after years of regulatory and legal wrangling, and the Trans Mountain expansion, which suffered delays and cost overruns.

The province has also assembled a technical working group made up of government and regulatory officials, industry veterans and Indigenous leaders.

With the initiative, the Alberta Premier aims to get several federal environmental policies reversed, including a ban on oil tanker traffic along the northern B.C. coast, and a cap on oil-sector emissions.

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“I’ve made this case abundantly clear to the Prime Minister, and what I can tell you is this: I’m more optimistic now than I have ever been, that the concerns of Albertans are finally being heard,” she said at a news conference.

“While we still have details to work out, I do look forward to reaching an agreement that will profoundly benefit Alberta and Canada’s economies.”

Peter Tertzakian, deputy director of ARC Energy Research Institute, said the Alberta plan could win public support owing to a growing recognition that developing oil and gas resources can improve national productivity and contribute to GDP. In addition, there is more openness among Indigenous communities to backing energy projects, he said.

“I think it has considerable chance of going further. The real test will be whether or not investors and foreign capital will come back in,” Mr. Tertzakian said. “That’s really going to be key.”

The government doesn’t want to build a multibillion-dollar pipeline with taxpayer dollars, Ms. Smith said, adding that doing so would represent a failed exercise. Alberta will, however, contribute $14-million to support early planning, including developing cost estimates, engagement and devising a credible proposal for Ottawa to consider.

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The province may also provide loan guarantees to prospective Indigenous equity owners, she said.

Federal Energy and Natural Resources Minister Tim Hodgson said the Major Projects Office will examine the plan.

“If Alberta wishes to be the initial proponent and funder of a pipeline to the West Coast and put it forward to the MPO, that is within their right to do so. We have an active and constructive dialogue with Alberta and will always look for ways to advance shared priorities,” Mr. Hodgson said.

He noted that Ottawa expects any pipeline project to move forward in conjunction with capturing and storing carbon-dioxide emissions.

B.C. Premier David Eby has been reluctant to directly oppose Alberta’s pipeline ambitions but said Wednesday that his government would fight to keep the existing ban on large oil tankers in northern coastal waters.

Lifting the ban to enable a new pipeline would create a backlash that could undermine B.C.’s expansion of liquefied natural gas, which is now shipping from the North Coast, he said.

“It’s not just a threat to our pristine coast that so many British Columbians, including myself, value, but it is a direct economic threat to the kind of economy that we’re trying to build in the country here,” he told reporters.

Even with an application backed by the Alberta government, Mr. Eby said there is no viable pipeline project to oppose yet.

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Ms. Smith said she’s aware that she has work to do in reaching agreement with her B.C. counterpart. The two jurisdictions are already co-operating on a number of initiatives, she added, including LNG expansion and intertie connections to support each other’s electricity grids.

“I like to build with other premiers on areas in which we agree,” she said. “We don’t always agree on everything all the time, but I think we’ve got a lot of common ground to start from. And I think as we continue on and build the relationships, that we’ll be able to, I hope, win him over.”

Some Indigenous groups are supporting the process, including the National Coalition of Chiefs. Its president, Dale Swampy, said the group is “especially happy that they have decided to engage with Indigenous nations in B.C. and Alberta right from the very beginning of the process.”

However, Coastal First Nations, whose members are long-time pipeline opponents, rejected the plan.

“As the rights and title holders of B.C.’s North and Central Coast and Haida Gwaii, 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, elected chief councillor of the Heiltsuk Tribal Council and president of the Coastal First Nations, said in a statement.

With reports from Justine Hunter and Brent Jang