A former Alberta energy minister has expressed skepticism about the likelihood of a proposed bitumen pipeline to the northwest B.C. coast being built by the private sector alone. Sonya Savage indicated that the chances of a private sector proponent materializing for the project are nearly non-existent. This caution from the former United Conservative minister comes as Premier Danielle Smith urges Ottawa to expedite the approval process for the pipeline, citing developments in Venezuela and the potential for increased oil production in that country as reasons for urgency.
Smith recently met with Prime Minister Mark Carney to discuss the situation in Venezuela, which exports heavy oil similar to Alberta’s oilsands production. Following the meeting, Smith shared a letter on social media outlining Alberta’s plan to submit a pipeline application to the Major Projects Office by June, with a request for approval by fall to avoid market share loss and maintain Canada’s competitive standing in the global energy landscape.
In her letter, Smith also called for regulatory approvals for nation-building projects to be completed within six months, emphasizing the need for faster processes. While Carney’s major projects office aims to finalize regulatory reviews within two years, Smith deemed this timeline as excessively long.
Last November, Carney and Smith signed a memorandum of understanding to collaborate on the bitumen pipeline project, with Alberta intending to lead the proposal. The agreement stipulates that the pipeline would be privately constructed and financed. Industry observers have suggested that pipeline companies may seek financial support from Alberta or Ottawa to cover unforeseen costs beyond their control.
Savage, drawing on her experience in the energy industry, highlighted historical instances where federal government intervention was crucial for major infrastructure projects like the TransCanada mainline gas line and Enbridge’s Line 9. Despite Alberta and Ottawa referring to the pipeline as essential for nation-building, not all Canadian leaders share this sentiment.
B.C. Premier David Eby proposed investing in a new oil refinery instead of the pipeline, arguing that it would be a more beneficial use of funds. However, Savage countered this suggestion, stating that the economics of refining oil locally would still require transportation to reach larger markets, making the refinery proposal less viable.
Carney’s office has not yet commented on Smith’s push for faster project approvals, while the Prime Minister’s Office reaffirmed Canada’s competitive advantage in the oil industry. Following the upheaval in Venezuela, Canadian energy stocks experienced a decline, and oil prices have been on a downward trajectory since last year.
The rewrite is complete.