The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, facing several challenges ahead, as outlined by analysts at CIBC World Markets in a recent report. 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 could potentially begin around 2033 or 2034, according to a provincial official.
The analysts, Robert Catellier and Rogan Anantharajah, expressed optimism but cautioned that the proposed timelines are best-case scenarios. The Alberta government revealed these targets after reaching an agreement with Ottawa on increasing the market price of carbon to $130 a tonne by 2040.
One of the remaining agreements to finalize involves the funding of the multibillion-dollar Pathways carbon capture project by the province, federal government, and industry players represented by the Oil Sands Alliance. The success of Pathways is a prerequisite for the pipeline project and vice versa.
While no private-sector entity has stepped forward to bear the risks and costs, the Alberta government is leading the pipeline application process, with input from top pipeline executives on technical matters and routing options. A national-interest designation would expedite the approval process through the federal major projects office.
The proposed pipeline aims to transport up to one million barrels per day of oilsands crude to the West Coast, significantly increasing access to Asian markets compared to the current capacity of the Trans Mountain pipeline. The government favors a northern port option due to its proximity to Asia.
Despite progress, unresolved issues include negotiations with British Columbia, consultations with Indigenous groups, and concerns about the ban on oil tanker loading in northern B.C. Coastal opposition to lifting the tanker ban remains strong.
ATB Financial’s chief economist, Mark Parsons, highlighted the positive signal sent by the clarified construction timelines, indicating potential economic benefits. ATB estimates that the Pathways project and expanded pipeline capacity could boost Canada’s real GDP by 1.1% and Alberta’s by 5.1% between 2027 and 2035, if successfully implemented.
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