In the ongoing discussions regarding the necessity of a new oil pipeline in Canada, the key element missing is a company willing to undertake its construction. Despite Alberta Premier Danielle Smith’s statement in June that no company had put forward a proposal, promising one would emerge soon, no such development has occurred yet.
To address this gap, the federal government has established the Major Projects Office in Calgary with the primary objective of identifying crucial infrastructure projects and expediting their progress. The forthcoming list of projects deemed pivotal to the nation, as per Ottawa, is anticipated to be disclosed in the upcoming week.
The Alberta government is particularly eager to see a new pipeline included in this list, especially given Prime Minister Mark Carney’s strong indication that such a proposal stands a high chance of approval. Alberta’s Minister of Energy and Minerals Brian Jean has expressed optimism following discussions with Canada’s Minister of Energy and Natural Resources Tim Hodgson, acknowledging Ottawa’s commitment to facilitating the advancement of a major export pipeline from Alberta to the B.C. coast.
However, major pipeline companies have yet to announce or express public interest in constructing a new oil pipeline in Western Canada. This absence of proposals can be attributed to the substantial costs, complexities, and a history of unsuccessful projects in the past few decades.
The challenges faced by developers were exemplified by the Trans Mountain expansion project, which encountered significant delays, cost overruns, and protests, leading to Ottawa acquiring the project from the original developer, Kinder Morgan. The expertise, resources, and long-term commitment required for such ventures make it a daunting task for only a few companies.
The process of developing a pipeline project involves meticulous planning, community consultations, and securing commitments from oil producers, adding to the intricacy of the endeavor. The establishment of the Major Projects Office aims to streamline the regulatory assessment process to fulfill Carney’s promise of expediting infrastructure development.
While oil production in Alberta continues to grow, the decline in oil prices compared to previous years has impacted the industry. Despite the economic benefits of the oil sector, the construction of a new pipeline raises questions about the country’s transition to cleaner energy sources.
The government’s interest in diversifying trading partners and stimulating the economy, amidst U.S. tariffs, underscores the importance of exploring new markets for Canadian products, including oil. Although the demand for oil remains strong, potential opposition and environmental concerns pose challenges to proposing new pipelines.
