The recent memorandum of understanding between Prime Minister Mark Carney and Alberta Premier Danielle Smith to construct a new oil pipeline to the Pacific coast appears less promising than initial reactions suggested. The resignation of Heritage Minister Steven Guilbeault from cabinet in protest made the agreement seem like a significant victory for Alberta, but deeper analysis reveals substantial barriers remain.
Major Obstacles Remain Unaddressed
The memorandum signed on Thursday, November 27, 2025, fails to eliminate two critical barriers that could ultimately prevent the pipeline's construction. Prime Minister Carney has maintained British Columbia's NDP government's veto power over the project and has preserved First Nations' ability to block development along the West Coast. The federal government has made no commitment to help persuade either group to support the pipeline.
These two obstacles alone present formidable challenges to the project's success. Without federal intervention to address BC and First Nations concerns, the pipeline faces an uphill battle that even high-level political agreements cannot overcome.
Financial and Environmental Hurdles
The agreement imposes significant financial burdens on Alberta's energy sector. Requirements include an expensive industrial carbon tax on Alberta businesses and the construction of massive carbon-capture infrastructure costing approximately $15 billion. These additional costs could make the pipeline project economically unviable for potential investors.
Furthermore, the MOU provides no guarantee that the federal ban on oil tankers off the West Coast will be lifted. The agreement's wording suggests the ban could potentially be removed if Alberta successfully addresses all constitutional, regulatory, financial, and environmental requirements independently. However, since Ottawa has committed no assistance in meeting these conditions, the likelihood of the tanker ban being lifted remains minimal.
The Tanker Ban Contradiction
The West Coast tanker ban presents a particularly frustrating obstacle for Alberta, given that Alaskan tankers regularly navigate these waters and Saudi oil tankers frequently travel up the St. Lawrence River to supply Quebec. This selective prohibition appears specifically designed to target Alberta oil exports rather than representing a consistent environmental policy.
Prime Minister Carney could potentially use ongoing First Nations opposition as justification for maintaining the tanker ban years from now, effectively blocking the pipeline's operational viability even if construction were completed. Without certainty that the tanker ban will be lifted, finding investors willing to risk billions on pipeline construction becomes extremely challenging.
Realistic Assessment of Pipeline Prospects
Considering all these factors, the probability of a new pipeline reaching the Pacific coast remains low despite the high-profile agreement. The memorandum represents a political achievement for Alberta Premier Danielle Smith but delivers limited practical progress toward actual pipeline construction.
The resignation of Minister Guilbeault may have created the appearance of a major Alberta victory, but the underlying reality suggests only about a 25% chance of successful pipeline completion. The fundamental economic and political barriers that have prevented previous pipeline projects remain largely intact, requiring more substantial policy changes than those contained in the current memorandum of understanding.
