We will all be celebrating the 159th birthday of Canada next week. July 1 is also the date on which Alberta Premier Danielle Smith is scheduled to deliver a proposal containing details on an oil pipeline from Alberta to the West Coast. The pipeline is expected to carry a million barrels of oil daily, intended for markets in Asia. Recently, Prime Minister Mark Carney committed to presenting the proposal to the new bureaucracy he created – the Major Projects Office (MPO) – with the expectation that the MPO would designate the pipeline to be in the national interest by October 2026. Should all this come to pass as planned, approvals for construction are targeted for September 2027.
This proposal is expected to contain such elements as several potential pipeline routes, including options in the southern part of B.C. It will also likely contain commitments to collaborate with B.C. and indigenous communities regarding the sharing of economic benefits and addressing environmental concerns. What will be missing from the proposal is a private sector proponent – a company or companies that will undertake to actually build the pipeline. This is of course an essential element if the pipeline is to be built at all.
The oil and gas industry has given mixed signals on their support of this particular pipeline proposal. The insistence of the federal Liberal government that a very costly carbon capture and storage element to the proposal is essential to the pipeline being approved has attracted much criticism. Recently, the CEO of Cenovus Energy, Jon McKenzie, came out with a blazing criticism of the federal government’s requirement that any pipeline proposal would need to include a major carbon capture element. As Cenovus is one of the largest energy companies in North America, the viewpoint of its CEO is highly relevant.
The carbon capture and storage project under consideration is estimated to be massively expensive, with an estimated cost of $20-30 billion. McKenzie stated that this requirement would make the pipeline project uneconomic and unfinanceable with current regulatory conditions. While Carney and his colleagues have frequently stated that the so-called “decarbonized oil” that will result from the carbon capture process will command a price premium world-wide, McKenzie among others debunked that absurdity by noting how other countries are clamouring for Canada’s oil and gas, as is. The notion of “decarbonized oil” seems to be a fever dream of Carney and some of his net zero acolytes much more than a reality. It is certainly something hardly any of our competitors in global energy markets are pursuing.
That was also a major point made by Cenovus’ McKenzie – that the huge costs of the carbon capture project will add a significant amount to Canada’s oil price such that it will be uncompetitive on world markets. Carney’s insistence on major industrial carbon taxes that other countries do not impose on their energy sector is another thing that will add costs to Canadian producers that their competitors do not face. McKenzie concluded by saying that neither the carbon capture project nor the West Coast pipeline really make any sense for private sector investment. This was a pretty damning comment on the prospects for success of the Alberta pipeline.
Even if everything were to go perfectly and the many negatives of this pipeline project were to be overcome, the best-case scenario is that oil could be flowing by 2033 or 2034. Other countries manage to complete pipeline projects much more quickly than this forecast. Despite the supposed support of the federal Liberal government of the pipeline, albeit with many punitive conditions, it certainly appears that Canada remains the country where major projects cannot get completed in a reasonable period of time.
Despite her best efforts, Alberta Premier Danielle Smith continues to be criticized by all sides. The Alberta separatist sympathizers would prefer she didn’t play ball with Ottawa at all. Some players in the oil and gas industry believe this pipeline will never be built and that Smith is being overly cooperative with the federal government. Other provincial premiers continue to accuse Smith of encouraging the separatist elements within the province when she is actually doing nothing of the sort. Other critics accuse her of not cooperating with the federal government despite her best efforts to do exactly that under difficult circumstances. The next few months will be critical to see if Ottawa lives up to its commitments on the pipeline and meets deadlines. To date, the Carney government has consistently missed deadlines on this project.
Other major roadblocks to this pipeline are also ramping up. Some First Nations groups have already stated how they will oppose this pipeline under any circumstances and will not be swayed by such things as being included as financial beneficiaries of the project. Current B.C. NDP Premier David Eby has stated that he is firmly and unequivocally opposed to this pipeline project. It would take a strong federal government indeed to overcome these objections. Carney’s track record so far has not indicated such strength. In fact, Carney’s preferred strategy seems to be that of constantly ragging the puck and putting off important decisions until years into the future. The next few months will be instructive as to whether Carney’s Liberals are truly in favour of this pipeline or are once again dishonestly pretending to go along while intending to do nothing of the sort.
Many Canadians are of the view that approval of this project by Ottawa is doing a major favour to Alberta. Nothing could be further from the truth. Businesses across Canada in every province benefit enormously from the health of our oil and gas sector, which has been kneecapped for years by the Trudeau and Carney governments. A large part of Canada’s dismal economic performance over the last 11 years has been a direct result of the constraints imposed on this sector by Liberal federal governments and some provincial governments. Canada’s oil and gas sector has also been a global leader in developing technology to reduce emissions and improve their economic efficiency. Whether they acknowledge it or not, all Canadians have a big stake in the success of this pipeline project and others like it, as it will be a boon to all Canadians.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
