Government of Alberta to Lead Effort to Build New Crude Pipeline in Canada -- 2nd Update

By Paul Vieira

OTTAWA--The western Canadian province of Alberta said Wednesday it will lead an effort to build a new crude-oil carrying pipeline from the oil sands to the northwest Pacific coast.

The Alberta government's push to add crude pipeline capacity will mark a major test of Prime Minister Mark Carney's pledge to ramp up investment in key infrastructure projects and trade corridors, like pipelines, to help Canada reduce its reliance on the U.S.

Carney has thrown the federal government's support behind other key infrastructure projects, but a pipeline is not yet one of them. The approval of a pipeline could test the Canadian leader's political mettle in promising to revive the country's economy while making meaningful progress on carbon reduction.

Alberta Premier Danielle Smith said the province would act as the new pipeline's proponent, arguing private-sector companies are shying away due to regulations on carbon emissions from energy companies and crude-oil transportation. Alberta, home to vast oil-and-gas reserves, believes that energy companies and investors would take over the project once government approval is secured.

The pipeline proposal, once submitted, is contingent on Carney repealing or easing some regulations, most notably a ban on the loading or unloading of crude oil on tankers along British Columbia's north coast. Alberta is planning to submit a formal application for approval from Ottawa by May, 2026. Officials envisage the pipeline could carry up to one million barrels of crude oil, destined for Asia-bound tankers in northwest British Columbia.

"This is a test of whether Canada works as a country," Smith said at a press conference, "because if we can't build with collaboration from the federal government and between provinces, if it's everybody gets to get their products going to market except Alberta, then that's not a country."

The proposal will likely face opposition from environmental groups, which argue new fossil-fuel projects will exacerbate efforts to reduce carbon emissions. Furthermore, the Premier of British Columbia, David Eby, has voiced reservations about a new pipeline headed to the northern provincial coast.

On Wednesday, Eby said his government would protect its coastlines. "We won't let this proposal, with no backer and no money, threaten real jobs for British Columbia's families," he said.

Smith clashed frequently with former Canadian prime minister Justin Trudeau, over his administration's environmental policies. Smith and other energy executives had argued Trudeau's measures -- from the tanker ban in northwest British Columbia to a cap on oil-and-gas emissions -- dissuaded investment in the resource sector and threatened to dampen living standards in western Canada, which relies on commodities to power growth.

"We actually have to create an investment climate so the private sector feels some confidence in investing in these kinds of projects," said Smith, about why the government is leading the effort.

Her relationship with Carney appears to be relatively positive, in large part due to Carney's promises to capitalize on the country's resources to help rewire an economy squeezed by U.S. tariffs. Last month, Carney said his administration could back a new pipeline depending on the willingness from the energy sector to reduce carbon emissions.

Carney has also promised to revisit some of the Trudeau administration's previous environmental policies that have irked the energy sector.

Smith and other energy executives are banking on growing public support for energy and infrastructure projects. Polling firm Leger said last month that nearly half of Canadians, 46%, identified large oil-and-gas projects as best able to deliver significant boosts to the economy.

Helping the Alberta government's effort is Alex Pourbaix, the chairman of the board at Cenovus Energy. At the press conference, Pourbaix said no energy chief executive would dare go to their board seeking cash on a new Canadian pipeline given the current regulatory landscape. Canada's energy sector, he added, is limited due to a lack of pipeline infrastructure to move oil and gas to faster-growing, non-U.S. markets. The bulk of Canada's crude-oil exports are U.S.-bound.

Changes to the regulatory regime, as proposed by Alberta, would lead to "an incredible renaissance of growth coming out of Alberta's energy sector," Pourbaix said.

Write to Paul Vieira at [e-mail]

(END) Dow Jones Newswires

10-01-25 1732ET