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Alberta Energy Minister Brian Jean, left, rises with fellow provincial cabinet minister Nathan Neudorf in the House of Commons in Ottawa on April 29.Justin Tang/The Canadian Press
Alberta’s initial proposal for a new oil pipeline to the West Coast, which it is due to submit to Ottawa’s Major Projects Office this week, will not be backed by any private-sector proponents, two sources say.
The province set itself a July 1 deadline to submit the proposal for fast-tracked federal consideration, against opposition from some British Columbia First Nations and B.C. Premier David Eby. The sources said Alberta will meet that timing, and will front the application as the pipeline’s initial proponent.
The Globe and Mail is not identifying the sources – one from government and the second from the fossil-fuel industry – who were not authorized to disclose the confidential deliberations.
While the initial proposal will be led by Alberta, the province’s Energy Minister, Brian Jean, told reporters recently that various proponents had approached the government to invest in the pipeline, including Indigenous groups. He also said an unnamed Fortune 500 company had discussions with the province about financing and building the entire pipeline.
Mr. Jean is slated to speak about the pipeline and Canada’s broader energy strategy at the Calgary Petroleum Club on Thursday, during a Canadian Global Affairs Institute event.
Alberta and Ottawa have said that a West Coast pipeline project would be headed by private backers, most likely a conglomerate, as opposed to taxpayers. But pipeline companies such as Enbridge Inc. have so far declined to take on the financial risk of developing a new oil conduit.
Enbridge says it’s not willing to take on development risk of Alberta pipeline project
The Alberta and federal governments have prioritized the pipeline at a time of rising separatist sentiment driven in part by a perception that Ottawa has opposed the province’s resource industry. Ottawa also views the pipeline as an important plank in its plan to diversify the country’s economy away from the United States amid the uncertainty driven by President Donald Trump.
Asked about Alberta’s coming submission, the Prime Minister’s Office said in an e-mail Monday it “continues to work collaboratively” with the province to grow Canada’s energy sector as it advances its proposal for an oil pipeline to serve Asian markets.
The project schedule foresees Ottawa making the determination by October that the pipeline would be listed as a project of national interest. If that designation is made, the government will assess the project under the Building Canada Act to determine the conditions required for construction and development. Alberta officials have said oil could then flow in a new pipeline by 2033 or 2034.
The Alberta and federal governments both view fast-growing markets in Asia as particularly attractive export destinations for Canadian oil and gas, especially given supply shortages caused by the war in Iran. The provincial government says it can only take full advantage of that region’s appetite for fossil fuels by securing more access to the Pacific via a new pipeline.
Mr. Eby has been highly critical of the process, which he said he has not been a party to, and the absence of a private-sector backer for the project.
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B.C. Premier David Eby, left, leaves the closing news conference of a meeting of western premiers in Kananaskis, Alta., on May 26.Jeff McIntosh/The Canadian Press
Alberta must also reach a deal on a major carbon-capture project, called Pathways, at the same time as it submits its pipeline pitch, government sources told The Globe last week.
The potential route of the pipeline has been a source of contention.
Premier Danielle Smith has long talked up a northern route to carry Alberta oil to the Port of Prince Rupert, B.C., or thereabouts. The port is favoured for its proximity to Asia as well as its depth, which would enable access by large crude carriers.
North or south? How potential pipeline routes to the West Coast would differ
But opposition from the B.C. government and many Indigenous groups, as well as a federal ban on oil tankers along B.C.’s northern coast, stand in the way of such a route. The Coastal First Nations alliance on Monday reaffirmed its opposition to a northern route.
As previously reported by The Globe, the federal government favours a route through southern B.C., which some believe would face fewer environmental hurdles and less resistance from Indigenous groups.
The Alberta government has said it would offer an equity stake to Indigenous nations, but the specifics of that are not expected to be in the initial application, one of the sources said.
Jeremy Barretto, regulatory specialist in the infrastructure, energy and resources group at the law firm Torys LLP, said there will likely be flexibility with the route and marine terminals in the application so it can be informed by feedback from the First Nations that would be affected. But the process is ambitious, given a tight, 14-month timeline from filing to an approval decision, he said.
“This is a tall order, but it’s responsive to trade pressures and demand for energy around the world,” Mr. Barretto said.
“And the government’s success will be determined in large part based on the success of consultation with Indigenous communities on the route, and if there’s a route that can get support from a meaningful number of those communities.”
Prosperity’s Path: If Alberta’s new pipeline has no private backer, it’s Ottawa’s fault
The same Asian markets being eyed as potential customers for Canadian oil and gas typically get the bulk of their supplies from the Middle East.
Iran’s retaliatory closing of the Strait of Hormuz on Feb. 28 throttled roughly 20 per cent of the world’s oil and gas supplies – a disruption that was keenly felt in Asia, where markets scrambled to find new sources of fuels.
Many countries that import fuel are already knocking on Canada’s door as the war in Iran prompts them to reassess where they get supplies, Fatih Birol, executive director of the International Energy Agency, said in an interview Monday.
With suppliers around the world competing for customers, Canada must work quickly to embrace its trade opportunities, Dr. Birol said – and that means rapidly building energy infrastructure, such as pipelines.
Dr. Birol wouldn’t weigh in on the commercial argument for or against a new pipeline, but said oil will continue to be part of the global energy mix, even if the world meets its climate targets.
“I hope that this oil will come from the countries where it is secure and where it is not used for political purposes, but a commercial decision is up to countries and companies to make the risk and benefits calculation,” he said.
Although fuel exports through the strait have started to recover in the wake of an interim peace agreement, a full recovery will take time, according to the IEA.