An Ambitious Plan For A West Coast Pipeline
Alberta’s plan to begin construction on a potential new West Coast oil pipeline by 2027 is ambitious and still faces major obstacles, according to analysts at CIBC World Markets.
The province wants to submit a proposal to the federal major projects office by July 1, have the pipeline designated a project of national interest by Oct. 1 and begin construction as early as Sept. 1, 2027. Oil could begin flowing around 2033 or 2034, a provincial official said last week.
CIBC Calls The Timeline Optimistic
CIBC analysts Robert Catellier and Rogan Anantharajah said the schedule reflects a strong sense of urgency, but described it as optimistic and closer to a best-case scenario.
Their assessment highlights the complexity of building major energy infrastructure in Canada, where regulatory approvals, political negotiations, Indigenous consultations, environmental concerns and financing all remain significant hurdles.
Carbon Pricing Deal Moves Project Forward
The Alberta government laid out its targets after finalizing one of the last outstanding elements of its energy accord with Ottawa. The agreement sets a path for the market price on carbon to gradually rise to 130 Canadian dollars per tonne by 2040.
The remaining side agreement involves Alberta, the federal government and industry players represented by the Oil Sands Alliance. They still need to settle funding terms for the multibillion-dollar Pathways carbon capture project.
Pathways And Pipeline Are Linked
Under the federal-provincial memorandum of understanding, the Pathways carbon capture project is a precondition for the pipeline, while the pipeline is also tied to the broader Pathways framework.
The Alberta government is leading the pipeline application because no private-sector company has yet stepped forward to take on the risk and cost. Pipeline executives are advising the province on technical issues, including possible routes.
National-Interest Status Could Speed Review
If the project receives a national-interest designation, it would move through a faster approval process under the federal major projects office established last year.
CIBC said some pipeline companies remain open to participating, but several conditions must still be met before the required investment in production, carbon capture and pipeline infrastructure becomes viable.
Export Capacity To Asia Is The Goal
The proposed pipeline would ship up to one million barrels per day of oilsands crude to the West Coast. That would more than double the volumes currently able to reach Asian markets through the existing Trans Mountain pipeline to the Vancouver area.
Alberta has expressed a preference for a northern port option because it would shorten shipping distances to Asia. However, that route faces major political and environmental resistance, especially because of the federal ban on oil tanker loading along much of northern British Columbia’s coast.
British Columbia And First Nations Remain Key
Negotiations with British Columbia, consultations with Indigenous peoples and clarity around the tanker ban remain unresolved. B.C. Premier David Eby, coastal First Nations and environmental groups have already reiterated their opposition to lifting or easing the ban.
ATB Financial chief economist Mark Parsons said the clearer construction timeline sends a positive signal and should increase pressure to move the project forward. ATB estimates that Pathways, Trans Mountain expansions and a new West Coast pipeline could add an average of 1.1% to Canada’s real GDP and 5.1% to Alberta’s real GDP between 2027 and 2035. For investors and policymakers, the upside is significant, but execution risk remains high.
