The Alberta government’s proposed timeline for commencing construction on a potential new West Coast oil pipeline is ambitious, facing numerous hurdles, as per analysts at CIBC World Markets. Alberta aims to present a proposal to the federal major projects office by July 1, have it recognized as a national interest project by Oct. 1, and begin construction as early as Sept. 1, 2027. Oil flow could potentially start around 2033 or 2034, according to a provincial official.
CIBC analysts Robert Catellier and Rogan Anantharajah view these timelines as optimistic and reflecting an ideal scenario. The province outlined these objectives following the finalization of an agreement between Alberta and Ottawa on increasing the market carbon price to $130 per tonne by 2040.
The remaining crucial agreement involves the province, federal government, and industry stakeholders represented by the Oil Sands Alliance concerning funding for the multibillion-dollar Pathways carbon capture project. This project is a prerequisite for the pipeline, and vice versa, under the federal-provincial memorandum of understanding.
The Alberta government is leading the pipeline application process, as no private entity has stepped forward to bear the associated risks and costs. Despite this, top pipeline executives are advising the province on technical aspects, including routing options. Designation as a project of national interest would expedite the approval process through the federal major projects office.
The objective of the proposed pipeline is to transport up to one million barrels of oilsands crude per day to the West Coast, significantly increasing the current volumes reaching Asian markets through the existing Trans Mountain pipeline to the Vancouver region. Alberta favors a northern port option due to the shorter distance to Asia.
Pending issues include the Pathways project, negotiations with British Columbia, consultations with Indigenous groups, and clarity on the oil tanker loading ban on the northern B.C. coast. B.C. Premier David Eby, coastal First Nations, and environmental organizations have reiterated their opposition to any potential relaxation of the tanker ban covering ecologically sensitive coastal areas.
ATB Financial’s chief economist, Mark Parsons, noted that the defined construction timelines for the pipeline signal progress and should apply pressure to expedite the process. ATB projects that Pathways and increased pipeline capacity could significantly boost Canada’s and Alberta’s real GDP between 2027 and 2035.
In conclusion, if these plans are successfully implemented, it could have a substantial positive impact on Alberta’s economic forecast and Canada’s overall outlook.
