The Alberta government has set an ambitious timeline for the potential construction of a new West Coast oil pipeline, but analysts at CIBC World Markets caution that many challenges lie ahead. The province aims to submit a proposal to the federal major projects office by July 1, designate it a national interest project by Oct. 1, and start construction as early as Sept. 1, 2027. Oil flow may not begin until around 2033 or 2034, according to a provincial official.
CIBC analysts, Robert Catellier and Rogan Anantharajah, consider these timelines optimistic and reflective of a best-case scenario. The recent agreement between Alberta and Ottawa on gradually increasing the market price on carbon to $130 a tonne by 2040 marks significant progress, with the final agreement pending for the funding of the Pathways carbon capture project.
The Alberta government leads the pipeline application process, as no private sector entity has yet committed to the project. Despite this, top pipeline executives are advising on technical aspects, such as routing options. A national-interest designation would facilitate a faster approval process through the federal major projects office.
The proposed pipeline aims to transport up to one million barrels per day of oilsands crude to the West Coast, potentially doubling the current capacity to reach Asian markets. The government prefers a northern port option for shorter shipping distances to Asia. However, unresolved issues include negotiations with British Columbia, consultations with Indigenous groups, and concerns over the ban on oil tanker loading in northern B.C.
ATB Financial chief economist Mark Parsons believes that the clarified construction timelines signal positive momentum and could expedite the project. ATB estimates suggest that Pathways and additional pipeline capacity expansions could significantly boost both Canada’s and Alberta’s GDP between 2027 and 2035.
Stakeholders, including B.C. Premier David Eby, coastal First Nations, and environmental groups, maintain strong opposition to potential changes to the tanker ban in ecologically sensitive areas. Despite the challenges, progress on the pipeline project could have a substantial economic impact if successfully executed.