The Alberta government’s aggressive timeline for the potential new West Coast oil pipeline faces significant challenges before construction can commence, according to analysts at CIBC World Markets. The province plans to submit a proposal to the federal major projects office by July 1, aiming for it to be designated a project of national interest by Oct. 1, with construction potentially starting as early as Sept. 1, 2027. Oil flow may not begin until around 2033 or 2034, as per a provincial official.
CIBC analysts, Robert Catellier and Rogan Anantharajah, noted in a recent industry update that while they appreciate the urgency, they view the proposed timelines as overly optimistic and contingent on ideal conditions. The Alberta government unveiled these targets following the finalization of an agreement with Ottawa to incrementally raise the market price on carbon to $130 per tonne by 2040.
The remaining agreement to be settled involves the funding of the multibillion-dollar Pathways carbon capture project, which is crucial for the pipeline according to a federal-provincial memorandum of understanding. Currently, the Alberta government is leading the pipeline application process as no private-sector entity has stepped forward to bear the financial and operational risks.
Despite ongoing discussions with potential pipeline companies and technical consultations with industry experts, several critical conditions must be met to support the substantial investments in production, carbon capture, and the pipeline. The objective of the proposed pipeline is to transport up to one million barrels of oilsands crude daily to the West Coast, significantly increasing access to Asian markets compared to the current capacity of the Trans Mountain pipeline.
The Alberta government favors a northern port location due to the shorter shipping distance to Asia. However, unresolved issues include negotiations with British Columbia, consultations with Indigenous groups, and concerns regarding the ban on oil tanker loading in northern B.C. coastal waters.
Key stakeholders, including B.C. Premier David Eby, coastal First Nations, and environmental organizations, have voiced strong opposition to any potential relaxation of the tanker ban along the ecologically sensitive coastline. Financial experts, like ATB Financial’s chief economist Mark Parsons, view the clarified construction timelines as a positive development that could drive progress on the project.
ATB Financial estimates that the Pathways project and the expansion of pipeline capacity could have a significant economic impact, potentially boosting Canada’s real GDP by 1.1% and Alberta’s by 5.1% between 2027 and 2035. Parsons emphasized that if these initiatives are successfully implemented, it could represent the most substantial growth opportunity for Alberta and a significant contribution to the national economy.