The Alberta government’s proposed timeline for commencing construction on a potential new West Coast oil pipeline is deemed ambitious, facing various hurdles, as per analysts at CIBC World Markets. The province aims to present a project proposal to the federal major projects office by July 1, obtain national interest designation by Oct. 1, and start construction as early as Sept. 1, 2027. Oil flow may commence around 2033 or 2034, as mentioned by a provincial official during a recent media briefing.
CIBC analysts, Robert Catellier and Rogan Anantharajah, expressed cautious optimism about the timelines set, considering them to be optimistic and representing an ideal scenario. The Alberta government outlined these targets following the finalization of an energy agreement with Ottawa, which includes a gradual increase in the market price on carbon to $130 per tonne by 2040.
One remaining agreement to be reached involves the funding of the multibillion-dollar Pathways carbon capture project by the province, federal government, and industry consortium represented by the Oil Sands Alliance. The success of Pathways is a prerequisite for the pipeline project, and vice versa.
The Alberta government is leading the pipeline application process, as no private sector entity has yet emerged to undertake the associated risks and costs. Despite this, top pipeline executives are providing technical guidance to the province on various aspects of the proposal, including routing options. A national interest designation would facilitate a swift approval process through the federal major projects office.
The goal of the proposed pipeline is to transport up to one million barrels per day of oilsands crude to the West Coast, significantly increasing the capacity to supply Asian markets compared to the existing Trans Mountain pipeline. The Alberta government favors a northern port location due to the shorter shipping distance to Asia.
Challenges that remain include finalizing the Pathways project, ongoing negotiations with British Columbia, consultations with Indigenous groups, and clarification on the ban on oil tanker loading in northern British Columbia.
Despite opposition from B.C. Premier David Eby, coastal First Nations, and environmental organizations regarding potential changes to the tanker ban, the increased clarity on the pipeline construction timelines has been viewed positively. ATB Financial’s chief economist, Mark Parsons, stated that this development sends a favorable signal and should drive efforts towards completion.
ATB estimates suggest that Pathways and expanded pipeline capacity could contribute significantly to Canada’s and Alberta’s GDP growth between 2027 and 2035. Parsons emphasized the substantial positive impact on Alberta’s economic outlook if these projects come to fruition.
