It’s been years since the prospect of a pipeline to carry oil from the West to the East of Canada has been front and centre.
But new comments by the federal energy minister amid U.S. tariff threats have many asking: could it finally happen?
Trump has threatened a 10 per cent tariff on energy resources from Canada along with a 25 per cent tariff on all goods. His threat has leaders across industries and provinces, including energy and even Quebec — long opposed to a new oil pipeline — asking how to mitigate the threat.
“Being so dependent on the United States for the export of oil is a vulnerability,” Natural Resources and Energy Minister Jonathan Wilkinson told reporters on Thursday.
The comments came a day before Prime Minister Justin Trudeau held an economic summit to discuss ways to diversify trade among provinces and remove internal barriers to support each other.
At that summit, he was heard on a hot mic telling business leaders that Trump thinks absorbing Canada is the easiest way to benefit from its resources.
Could a West to East pipeline happen? Unlikely, experts say
Alberta Premier Danielle Smith said just last month that she would like to see conversations resume regarding the previously proposed Northern Gateway pipeline and Energy East pipeline as a way to help Alberta move its oil more easily to international markets and elsewhere in Canada.
Smith reiterated that call this week, telling Global News on Tuesday she was looking forward to speaking with her counterparts, in B.C. and Quebec in particular, about building more pipeline access on both coasts.
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“I hope that this has been a wake-up call to Western, to Eastern Canada, that they are 100 per cent reliant on oil coming in from foreign sources and gas coming in from foreign sources and we’re a solution,” Smith said.
Saskatchewan Premier Scott Moe said he was hopeful it would happen.
“We would need a commitment, I think, at this point from the federal government that they are actually going to build and they’re going to support not only that pipeline to create energy security for all Canadians with Canadian products,” he said.
“But also support energy infrastructure and all transportation infrastructure so that a province like Saskatchewan is able to access our ports reliably, affordably.”
Quebec Premier Francois Legault has also suggested Trump’s tariffs could change Quebecers’ opposition to a pipeline, saying if there’s “social acceptability,” the government would be open to these projects including a pipeline.
But while there’s renewed talk of the idea, actually doing so could pose issues as it has in the past.
The Northern Gateway pipeline, which would link Alberta to the Pacific Ocean, was initially approved by the federal government in 2014, but cancelled two years later in a legal challenge.
A year after that pipeline was cancelled, TransCanada did the same with its plans for the proposed Energy East pipeline, which would’ve connected Alberta to New Brunswick, in part due to opposition from Quebec.
Andrew Leach, an economist at the University of Alberta, told Global News that oil and gas producers in the West have shifted gears away from a cross-Canada approach.
“If you’re an exporter out of Western Canada, what you want is the shortest route to a high value market,” he said in an interview with Global News. “And right now, the high value market is Asia and if you’re building a pipeline in Edmonton to Saint John, that is in no way the shortest route to market.”
Leach added while there was a lot of support for projects like Energy East when it was proposed, exporters still want to find the shortest route possible.
Pipeline builders and operators appear unlikely to back the idea, too.
“With the completed spinoff of South Bow, we are no longer in the oil pipeline business and the Energy East project was terminated in 2017,” a spokesperson for TCEnergy said in a statement.
The Trans Mountain pipeline, which was bought by the federal government in 2018 and runs from Alberta to Burnaby, B.C., is the only oil pipeline that can serve other markets.
Jason Balasch, a vice-president at the firm, said on Thursday it was looking at expansion projects but was not looking to add a third line.
Last month, McGill University professor Amy Janzwood told Global News reviving the Northern Gateway would not make sense, and said it was not major pipeline companies making revival proposals but politicians.
Enbridge, the Alberta-based pipeline and energy company behind Northern Gateway, told Global News two weeks ago that it has no plans to revive it, instead focusing on their pipeline that’s in the ground.
According to Finance Minister Dominic LeBlanc on Friday, there’s yet to be any submission for a project to bring oil to the East Coast.
“It’s a hypothetical discussion,” he said. “If some large Canadian pipeline company with a lot of private investment at one point actually puts before the regulator a project, then provincial and federal governments would evaluate the project.”
Nearly all of Canada’s crude oil exports — about four million barrels a day — go to the U.S.
—with files from The Canadian Press and Global News’ David Akin, Bryan Mullan, Karen Bartko and Morgan Black