Alberta working with oil companies on pipeline proposal, Danielle Smith says

Globe and Mail

a day ago

Alberta Premier Danielle Smith says her government is working with oil companies to try and secure a proposal for a new pipeline to the west coast – and says she expects Prime Minister Mark Carney to 'operate in good faith' on the pipeline issue.
The Alberta government has also pitched Mr. Carney on a kind of quid pro quo, in which oil companies commit to building the Pathways carbon capture project if he greenlights an oil pipeline.
Oil and gas pipelines have come into sharp focus in the wake of President Donald Trump's trade war, as Canada's fossil fuel sector searches for more opportunities to diversify itself from the United States, its largest customer.
Mr. Carney has also pledged to make Canada into an energy superpower, but Ms. Smith says meeting that goal will rely on new pipelines that can transport Alberta oil and gas to a Canadian coast –west, north or east – for access to overseas markets.
British Columbia's Energy Minister, Adrian Dix, recently shut down the idea of a new pipeline in the province, citing the impracticality and massive costs associated with such a proposal.
But Ms. Smith told the Global Energy Show in Calgary on Wednesday that she's confident she can convince the province's premier, David Eby, of the merits of an oil pipeline.
'We're doing what we can to address the legitimate concerns that we heard,' Ms. Smith said.
'What I've heard them say recently is there's no project - no project and no proponent. Well, that's my job. There will be soon. We're working very hard on being able to get industry players, private-sector players, to realize this time might be different.'
Ms. Smith said there may be a consortium of companies interested in joining forces to build a pipeline. If so, she said Alberta would work with the group to test out Mr. Carney's promised two-year approval process for major infrastructure projects.
'We know that it's a chicken-and-egg problem, that no one's going to come forward with a project without some guarantee that's going to be approved,' she said. 'The Prime Minister, I want to take him at his word that he wants to operate in good faith. So we're going to operate in good faith.'
The ultimate goal is to get an oil pipeline onto a list of major infrastructure projects being developed by the federal government. Ms. Smith said she also wants to see the Pathways Alliance carbon capture project on that list.
The Pathways Alliance is a consortium of Canada's six largest oil sands companies, which together have publicly committed to reaching net-zero greenhouse gas emissions from oil sands production by 2050.
At the heart of the group's pledge is a 400-kilometre-long pipeline that would transport carbon captured at oil sands facilities to an underground hub near Cold Lake, Alta., reducing emissions by 22 megatonnes a year.
The project could cost anywhere from $10-billion to $20-billion – an amount that's all expense, because there is no revenue associated with it, Ms. Smith said.
'But if you couple it with a million barrel-per-day pipeline, that allows you $20-billion worth of revenue year after year after year for the lifetime of that project. All of a sudden, a $10-billion to $20-billion cost to decarbonize looks a lot more attractive when you have a new source of revenue.'
Ms. Smith said she doesn't believe it would be problematic to fill a new pipeline, given that Enbridge recently announced an open season on its Flanagan South pipeline expansion to the U.S. for 100,000 barrels, and drew 400,000 barrels of interest.
'What we are hearing from the energy sector is: Build it, they will come.'