The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, according to analysts at CIBC World Markets. The province aims to submit a proposal to the federal major projects office by July 1, have it designated a project of national interest by Oct. 1, and commence construction as early as Sept. 1, 2027. Oil flow is anticipated to start around 2033 or 2034, as per a provincial official.
The analysts, Robert Catellier and Rogan Anantharajah, view the timelines as optimistic and representing a best-case scenario. The Alberta government revealed these targets following the finalization of an agreement with Ottawa on increasing the market price of carbon to $130 a tonne by 2040.
The remaining agreement to be settled involves the province, federal government, and a consortium of industry players represented by the Oil Sands Alliance concerning funding for the multibillion-dollar Pathways carbon capture project, which is a prerequisite for the pipeline. The Alberta government is leading the pipeline application process, as no private-sector entity has come forward to take on the risks and costs.
Although some pipeline companies are open to participating in the project, there are still outstanding conditions that need to be addressed to support the substantial investments in production, carbon capture, and the pipeline. The goal of the pipeline is to transport up to one million barrels per day of oilsands crude to the West Coast, significantly increasing the volumes reaching Asian markets compared to the existing Trans Mountain pipeline.
The Alberta government prefers a northern port option due to the shorter shipping distance to Asia. Despite progress, unresolved matters include negotiations with British Columbia, consultations with Indigenous communities, and clarity on the ban on oil tanker loading on the northern B.C. coast.
BC Premier David Eby, coastal First Nations, and environmental groups have reiterated their opposition to any potential easing of the tanker ban. ATB Financial’s chief economist, Mark Parsons, noted that the clarified construction timelines for the pipeline send a positive signal and should push for its completion.
ATB estimates suggest that the Pathways project and planned pipeline expansions could significantly impact Canada’s and Alberta’s GDP between 2027 and 2035. Parsons highlighted the potential positive impact on Alberta’s economic forecast and Canada’s overall outlook if these projects are successfully executed.