Alberta Premier Danielle Smith has achieved a significant political victory by securing federal Liberal support for an oil pipeline to Canada's West Coast. However, despite this apparent breakthrough, substantial regulatory barriers and carbon policies continue to threaten the project's viability.
Memorandum of Understanding Details
The recently announced Memorandum of Understanding outlines specific conditions for a proposed pipeline that would transport one million barrels daily of bitumen, alongside an expansion of the Trans Mountain Pipeline (TMX) by 300,000 to 400,000 barrels. While this agreement places the project on Ottawa's major project list, several conditions could potentially derail the entire initiative.
The federal government has committed to suspending the West Coast tanker ban and streamlining regulatory reviews under the Impact Assessment Act specifically for this pipeline project. Additionally, Ottawa will not proceed with proposed oil and gas emission caps, instead requiring methane emissions to decrease to 75 percent of 2012 levels.
Financial and Environmental Considerations
Both federal and provincial governments have committed financial support for industry efforts to decarbonize oil production. This includes completing the massive $16.5-billion Pathways project focused on carbon capture, sequestration, and underground storage. Alberta has also agreed to strengthen its big-emitter carbon tax program.
However, any pipeline development must satisfy multiple conditions for major project approval, including strengthening Canada's autonomy and security, demonstrating likelihood of completion, advancing Indigenous interests, and contributing to climate change goals. Prime Minister Mark Carney has emphasized the importance of diversifying Canada's economy through Asian market access for Canadian oil.
British Columbia's Critical Role
A potentially significant obstacle emerged when Carney added an unexpected condition requiring approval from British Columbia's government. This requirement recalls previous conflicts when the NDP government under John Horgan strongly opposed the TMX pipeline expansion, despite federal jurisdiction over inter-provincial transportation.
Current B.C. Premier David Eby has expressed opposition to new oil pipelines, though economic pressures might influence his position. British Columbia faces substantial economic challenges, including record-high emigration of 70,000 residents to other provinces this year, the largest per capita deficit in Canada, and significant downturns in the forest sector due to U.S. tariffs.
The success of this pipeline initiative remains uncertain, balancing between Alberta's energy ambitions and persistent regulatory and political challenges. If the West Coast pipeline ultimately proves unattainable, Canada faces potential international embarrassment and heightened regional alienation.
