vladymyrb / Depositphotos.com
CALGARY — Discussions surrounding a proposed new oil pipeline from Alberta to Canada’s west coast are accelerating, but questions remain about the project’s route, economics and political support.
The Alberta government is working toward submitting a proposal for a new one-million-barrel-per-day pipeline to a federal major projects office by July 1, with hopes the project could be designated as being in the national interest later this year.
The proposal is aimed at increasing access to Asian markets and reducing Canada’s dependence on the United States, which currently receives the vast majority of Canadian crude exports.
Alberta officials have indicated the province may initially propose a broad corridor rather than a specific route. Indigenous consultations and discussions with British Columbia are expected to play a major role in determining the final path.
Documents made public in recent weeks suggest Alberta has been studying four potential routes, including three that would terminate on British Columbia’s north coast near Prince Rupert and another that would connect to the Vancouver area.
British Columbia Energy Minister Adrian Dix has expressed frustration over what he described as limited communication regarding the route options. He has also pointed to significant challenges facing any proposal, including the federal tanker ban on B.C.’s north coast, opposition from some First Nations and the absence of a private-sector project proponent.
The issue was a major topic of discussion at the Global Energy Show in Calgary this week, where federal Natural Resources Minister Tim Hodgson promoted Canada as a reliable energy supplier and said the country is “open for business” as global energy security concerns continue to grow.
The federal government and Alberta have recently signed agreements intended to advance both a new west coast oil pipeline and the proposed Pathways Alliance carbon capture and storage project, a multibillion-dollar initiative designed to reduce emissions from oil sands operations.
However, industry leaders have raised concerns about whether current economic conditions support the pipeline.
Cenovus Energy chief executive Jon McKenzie said the project is currently “unfinanceable” under Canada’s existing regulatory and carbon-pricing framework.
McKenzie told conference attendees that industrial carbon pricing reduces the competitiveness of Canadian oil production and discourages the production growth needed to fill a major new export pipeline.
He also questioned the economics of the proposed Pathways carbon capture project, which industry estimates suggest could cost between $20 billion and $30 billion.
Despite those concerns, Alberta Premier Danielle Smith has continued to champion the project, arguing growing global demand for secure energy supplies creates an opportunity for Canada to expand exports and strengthen its position in international markets.
No private-sector company has yet agreed to build the pipeline, and no final route has been announced. Still, momentum behind the proposal appears to be growing as governments, industry and Indigenous communities begin discussions over what could become one of Canada’s largest energy infrastructure projects in decades.
Comments