Alberta Premier Danielle Smith announced the province is taking the lead on an application for a major new oil pipeline to the B.C. coast, a project it intends to send to Ottawa’s new Major Projects Office.Todd Korol/The Canadian Press
Cenovus Energy Inc. CVE-T chairman Alex Pourbaix knows the stakes are high as Canadians prepare to resume a deeply divisive debate over oil pipelines.
Alberta’s plan to propose a pipeline to the West Coast, announced Wednesday, is not fully formed. It does not have the backing of a company to shoulder the financial risk, or even a detailed route. It has already attracted the ire of British Columbia’s Premier and First Nations that have opposed previous attempts to export oil from B.C.’s North Coast.
Meanwhile, Alberta Premier Danielle Smith put the federal government on notice that the success of the initiative will be “a test of whether Canada works as a country.”
Mr. Pourbaix, who was recruited into the effort two weeks ago, said it is a worthwhile attempt to break through regulatory gridlock that has led to costly project failures. A veteran of both the oil sands and pipeline industries, he is under no illusion of the difficulties the concept will face, even after Ottawa signalled an openness to new energy projects.
“There’s going to be a huge amount of work that needs to take place with Indigenous communities, with other interested stakeholders,” Mr. Pourbaix said in an interview. “But a journey of 1,000 steps has to start somewhere. I was happy to throw my shoulder behind the wheel to see if we can get some traction with this idea and move it forward.”
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He is co-leading an advisory group of industry, government, regulatory and Indigenous leaders that the province assembled for the initiative. Alberta also enlisted three major pipeline companies, Enbridge Inc. ENB-T, South Bow Corp. SOBO-T and Trans Mountain Corp., to provide technical and regulatory expertise – though they are not putting money behind the effort.
The new proposal will test Prime Minister Mark Carney’s assertions that Canada can be both a conventional and clean energy superpower. It revisits a number of thorny issues, from Alberta’s aims to access more of the Asian oil market to Indigenous rights and title to national climate commitments. The oil and gas industry says the project will prove whether it can win back investors that fled after previous plans failed to launch.
Enbridge chief executive officer Greg Ebel said Ms. Smith has been lobbying him to commit to a new pipeline since the day he took the job in January, 2023. He said the Premier is concerned that energy companies, including those operating in the oil sands, are holding off on capital spending for fear that they won’t be able to export the resources they produce at the best possible price.
Mr. Carney needs to show leadership on energy infrastructure projects after “a decade of political vanity ran roughshod over economic utility,” at the hands of his predecessor Justin Trudeau, Mr. Ebel said in an interview.
Under the plan, Alberta will spend $14-million as an initial proponent to flesh out the project and submit an application by next spring, with the aim being that private sector and Indigenous backers will step forward to build and own the infrastructure once it garners regulatory approval. A pipeline could extend to Prince Rupert or Kitimat, B.C. from Alberta – a similar route to the ill-fated Northern Gateway proposal.
Construction on the expansion of the Trans Mountain oil pipeline in 2019.Candace Elliott/Reuters
As it stands, Mr. Pourbaix said, no CEO would dare take an oil pipeline proposal to their board of directors, given the regulatory, political and legal risks, as well as the history of failed projects that have led to billions of dollars in write-downs.
Alberta is hoping its plan for a one-million-barrel-a day pipeline makes the cut to be shortlisted for review by Ottawa’s Major Projects Office.
Along with that, it hopes “that the federal government makes the kind of fixes or amendments to some of these challenging regulations that would be very difficult for industry to try to get on their own,” Mr. Pourbaix said of discussions with the province.
That includes reversals of several environmental policies, including the ban on tanker traffic on the northern Pacific coast and the cap on oil and gas emissions.
This year, the federal government passed Bill C-5, authorizing it to fast-track certain projects it deems to be in the national interest. The government is selecting large developments to help withstand the tariffs imposed on Canada by U.S. President Donald Trump.
A polite ‘no’: B.C. Premier Eby seeks to avoid a battle over Alberta’s pipeline ambitions
Even so, building a pipeline after so many false starts will take collaboration between federal and provincial governments, Indigenous communities, and alignment with the entire supply chain of the oil and gas industry – including investors, said Peter Tertzakian, deputy director of ARC Energy Research Institute in Calgary.
“The province and the people of Alberta are a business partner, because they own the resource,” he said. “So it’s a business decision to make, because the royalties and taxes that flow off to the province are significant enough to justify, up to a certain point, being a financial partner.”
The biggest obstacle will be winning over First Nations that have already made it clear they remain staunchly opposed to oil transport in their regions, said Menno Hulshof, analyst at TD Cowen.
“The province and industry are certainly, in my mind, effectively moving forward the things that they can control in this process,” Mr. Hulshof said. “But the initial reaction from greater B.C. would suggest that this is going to be quite challenging.”
“But everything is negotiation – it’s going to be interesting to see what concessions are made where, to the extent that you believe that this can even materialize.”
B.C. Premier David Eby criticized the proposal on Wednesday, saying that it’s “not a real project” and that Alberta’s plan is “incredibly alarming to British Columbians, especially First Nations along the coast.”
Marilyn Slett, elected Chief Councillor of the Heiltsuk Tribal Council and president of Coastal First Nations.ETHAN CAIRNS/The Canadian Press
Members of Coastal First Nations are vehemently opposed to oil exports from B.C.’s North Coast. Pristine waters must be protected and tankers kept away, said Marilyn Slett, elected Chief Councillor of the Heiltsuk Tribal Council and president of Coastal First Nations.
“Any potential proponents, including the Alberta government, need to be put on notice that we’re not prepared to accept any crude oil through our waters,” she said in an interview this week.
So Alberta has its work cut out. The most important lesson from past missteps is to prioritize Indigenous voices from the start of the process, said Rajan Sawhney, Alberta’s Minister of Indigenous Relations, on Wednesday. She said she had spent the early part of last week calling Indigenous leaders from Alberta and B.C. to describe the plan.
Mark Podlasly, CEO of the First Nations Major Projects Coalition, said he thought it odd that Alberta did not identify any B.C. First Nations partners on the day of its launch, given how important they are to advancing the proposal.
His organization, which advocates for Indigenous ownership interests in pipelines, critical minerals mines, clean energy and infrastructure projects, was not among those that Alberta briefed on its plans, Mr. Podlasly said.
The province’s advisory group includes two Alberta leaders: Chief Jim Boucher of Fort McKay First Nation, who is also president and co-founder of the Saa Dene Group of Companies, and Dave Lamouche, president of the Metis Settlements General Council.
“So I don’t know if the Alberta government was trying to lure investors or do something else – maybe there’s some other thing they are after,” Mr. Podlasly said. “But from the B.C. First Nations side, there’s just going to be a very hard sell just because of how it was rolled out, without any advance warning and without identifying who their partners might be.”
Enbridge CEO Mr. Ebel said many Indigenous groups back Ms. Smith’s pipeline ambitions and their voices need to be heard in the debate. Yet, he acknowledged that it needs to be kept in mind “that on these major projects, not everyone is going to be happy.”
Ottawa ties stalled carbon-capture project to new pipeline
Federal Energy and Natural Resources Minister Tim Hodgson said he expects any pipeline project to move forward in conjunction with a plan to capture and store carbon-dioxide emissions. The Major Projects Office has identified “strategic areas of focus and activity” that will be transformative, including the “Pathways Plus” concept.
It involves the Pathways Alliance, made up of the country’s largest oil sands producers, which has proposed a $16.5-billion carbon capture and storage project, and an increase in transport capacity.
Mr. Pourbaix said increased pipeline capacity and decarbonization must go hand-in-hand, though he avoids the term “grand bargain,” which Ms. Smith has used to describe how the two goals can be developed in tandem to satisfy economic and environmental objectives.
“Basically, no other country in the world that is a major oil producer is doing anything material along the lines of reducing their emissions, as has been contemplated in Pathways,” he said. “So we certainly do see growth coming with a CO2 reduction strategy.”
With reports from Andrew Willis in Toronto, Brent Jang in Vancouver and Emma Graney in Fort McMurray