Alberta, Ontario propose new pipeline in bid to boost Canada’s energy independence

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Alberta and Ontario are proposing a new 3,300-kilometre pipeline route to carry crude oil across the country in a bid to reduce Canada’s reliance on foreign markets.

The proposed route, called the Northern Shield Energy Corridor, would travel across four provinces from Hardisty, Alta., to Sarnia, Ont., and would be able to move about 500,000 barrels of oil per day and expand to up to 800,000 barrels a day, the governments said.

Yet the cost of such a project – and who would pay for it – were not immediately known. Ontario said it is examining potential costs and planning to complete a feasibility study by the end of the year.

The announcement was jointly made by Alberta Premier Danielle Smith and Ontario Premier Doug Ford at a news conference in Calgary on Monday, during that city’s annual Stampede event.

Mr. Ford called the proposal a “win, win, win” for Ontario, Alberta and all of Canada. He said his province “won’t hesitate” to financially back the project, as Alberta and the federal government did with a recently proposed new oil pipeline route to the West Coast.

“I think it’s a great investment,” Mr. Ford said, adding that the government would get a good return on investment over the long-term.

He added he always prefers looking at private sector investment, and that it’s “going to be an incredible project,” calling it historic.

Mr. Ford said that he’s also spoken to the federal Major Projects Office, which advances nation-building projects.

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Ms. Smith also called pipelines “an excellent investment” that are revenue-generating projects, including in equity stakes for First Nations.

“I always hope that we can have private partners come forward on this, because that also allows us to have the market discipline. But I’m grateful that Premier Ford is willing to look at all the options,” she said.

She also said that public opinion has turned in favour of pipelines: “Pipelines have gone from impossible to a national imperative. The Alberta oil sands have gone from a target to a national treasure.”

The proposed pipeline route follows a memorandum of understanding signed last year by Alberta, Ontario and Saskatchewan, which committed the provinces to new energy and trade infrastructure.

Ontario said the pipeline would be built exclusively with Canadian steel and would lead to manufacturing and supply chain jobs in the country.

The proposed route would end in Sarnia, which has refining capacity. Ontario said it is also exploring pipeline extensions to new and existing ports to reach new markets abroad. It said the proposed route would also provide Manitoba and the Manitoba-Crown Indigenous Corporation with the opportunity to explore the feasibility of a pipeline extension to the Port of Churchill.

Ontario said it is also exploring a potential strategic petroleum reserve.

While Ontario’s press release includes a supportive quote from Saskatchewan Premier Scott Moe, it does not include a statement from Manitoba Premier Wab Kinew.

Mr. Ford said Mr. Kinew has to consult with his citizens, “but we’ll work something out.” The Manitoba Premier’s office did not immediately respond to an interview request.

Greenpeace Canada sharply criticized the proposal.

“Why don’t we cut out the middleman and just have Canadians send their tax dollars directly to ExxonMobil? There is no private sector proponent for these pipelines because there is no business case in a world where electric vehicles and heat pumps powered by wind and solar energy are cheaper, cleaner and faster to deploy than the fossil fuel megaprojects that are fuelling heat waves and wildfires,” said Keith Stewart, senior energy strategist at the environmental group.

Last week, the Alberta government also proposed a southern route for a new oil pipeline to the West Coast.

Alberta tapped three energy infrastructure companies in October last year – Enbridge Inc., South Bow Corp. and Trans Mountain Corp. – to provide technical and regulatory expertise on its proposal, but interest in getting involved in a multibillion-dollar pipeline project was muted.

Greg Ebel, the chief executive of Enbridge, said during a February earnings call that the company was unwilling to take on the financial risk of developing the new line.

In May, during the company’s annual meeting, he said: “Enbridge is not a proponent of this pipeline. And frankly, nobody is at this point in time as the conditions just don’t exist to commercialize such a proposal.”

South Bow chief executive Bevin Wirzba said in May that he wouldn’t speculate “on anything to do with the West Coast pipeline,” including whether his company would pursue an ownership stake.

Asked during a May interview whether Trans Mountain would consider becoming the project’s proponent, CEO Mark Maki said the federal government – which owns the corporation – has “expressed a strong desire to have a private proponent move the project forward, but they know very well that we’re here and what we’re capable of doing.”

Trans Mountain Corp. was announced as the lead proponent and developer, with a 10-per-cent share from Pembina Pipelines.

The federal government did not release a cost estimate for the pipeline. However, the Alberta government’s submission to the federal Major Projects Office said it could cost between $35.2-billion and $43.7-billion. It points out that in today’s dollars, the Trans Mountain Expansion Project, which was completed in 2024, cost about $35.3-billion.

Between existing capacity expansions on other lines and the proposed pipeline from Alberta to the West Coast, finding barrels to fill the line to Ontario could also be a challenge.

Capacity on the Trans Mountain and Enbridge Mainline system are set to add roughly 700,000 barrels of outgoing capacity from Alberta, and the Prairie Connector line being proposed by South Bow will carry another 550,000 barrels.

Alberta’s proposed pipeline would carry one million barrels per day to the West Coast.