A former Alberta energy minister expressed skepticism about the likelihood of a private sector-led bitumen pipeline to the northwest B.C. coast coming to fruition. Sonya Savage stated on CBC’s West of Centre podcast that the chances of a private sector proponent are nearly nonexistent. This cautionary statement coincides with Premier Danielle Smith’s call for Ottawa to expedite approval for the pipeline, citing recent developments in Venezuela and the potential for increased oil production in that country as additional reasons.
Premier Smith emphasized the importance of timely approval for the pipeline project, urging that the application be submitted by June and approved by fall to prevent market share loss and maintain Canada’s competitive edge in the evolving global energy market. She also requested that regulatory approvals for all nation-building projects be completed within six months, criticizing the current two-year timeline set by Prime Minister Mark Carney’s major projects office as excessively long.
In a memorandum of understanding signed last November between Prime Minister Carney and Premier Smith, it was agreed that the proposed pipeline would be privately constructed and financed, with Alberta taking the lead as the proponent. Industry experts have suggested that pipeline companies may seek financial support from Alberta or Ottawa to mitigate unforeseen cost overruns beyond their control.
Sonya Savage, drawing on her experience in the energy sector, 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’s classification of the pipeline as “nation-building” infrastructure, not all Canadian leaders share the same sentiment.
B.C. Premier David Eby proposed investing in a new oil refinery instead of the pipeline, emphasizing the need for domestic oil processing and reducing reliance on foreign refineries. Savage dismissed this idea, stating that the economics of refining oil locally would still necessitate transportation to the coast and international markets.
The Prime Minister’s Office responded to Smith’s concerns by affirming Canada’s oil competitiveness due to its low-risk and low-cost nature. Energy stocks in Canada experienced a decline following the turmoil in Venezuela, with oil prices showing a downward trend since the beginning of last year.