Should Canada build a pipeline to the West or the East?

Globe and Mail

2 days ago

Alberta Premier Danielle Smith went into the first ministers' meeting calling for a commitment to an oil pipeline to the northern B.C. coast. Some Eastern Canadian premiers suggested they're keen on an oil pipeline that would go across the country from west to east.
Neither exists yet. There's no company proposing to build either. But even as concepts, they are very different. They would serve very different purposes.
One is driven primarily by economics and diversifying markets. The other is about Canada's energy security.
Both are concerns kindled by U.S. President Donald Trump's trade war.
But is the chief goal to sell oil to new overseas markets or to protect Canada's domestic energy security?
There was no definitive answer on any pipeline route after Monday's meeting in Saskatoon between the premiers and Prime Minister Mark Carney.
But Mr. Carney indicated he would support a pipeline that delivers 'de-carbonized' barrels – and hinted that a pipeline could go ahead if the Pathways Alliance project for carbon capture also advances. Ms. Smith called that a 'grand bargain.'
And the Prime Minister certainly made it sound like he sees that pipeline going to the West Coast.
'The opportunity is there. The market is there, in Asia,' Mr. Carney said.
That suggests the Prime Minister favours a pipeline to the Pacific over one across the country.
That's what Ms. Smith wants – a pipeline to northern B.C., a route that is shorter and more profitable. It would diversify oil-export markets and make Canada's energy industry less dependent on U.S. customers.
Carney tells energy leaders how infrastructure projects in national interest will be assessed
Despite all the new political will, that proposal might not get through the gauntlet of opposition and legal challenges that killed a previous proposal for a pipeline to northern B.C., Northern Gateway.
Even the Conservative government of former prime minister Stephen Harper wasn't really willing to back Northern Gateway – it approved the project with 209 conditions and then handled it with a 10-foot pole.
The Federal Court of Appeal later quashed the approval because the government didn't meet its duty to consult First Nations. That duty is still there, entrenched in constitutional law, and no political leader can skip it.
Some premiers seemed to prefer a west-to-east pipeline. New Brunswick Premier Susan Holt expressed interest in a pipeline to Eastern Canada 'to make sure that all of Canada can benefit from its resources.' Ontario Premier Doug Ford likes the idea, too.
Carney faces pipeline pressure ahead of premiers meeting focused on infrastructure
Opinion: Carney's window of political opportunity for pipelines is short
But building a pipeline across the country would be enormously expensive, making the tolls to ship oil through it so high that it might not be profitable. An east-west pipeline might not get built unless the government steps in to subsidize it.
The only real justification for doing that would be to make sure that the oil shipped from Western to Eastern Canada doesn't flow through the United States.
In January, when premiers discussed potential retaliation to the tariffs that then-president-elect Trump was threatening, there was a lot of bluster that Canada might cut off oil exports to the U.S.
But Central Canada's oil supply travels from Alberta through the Line 5 pipeline in Wisconsin and Michigan and crosses back into Canada at Sarnia, Ont. In theory, the U.S. could cut off a lot of Canada's oil supply, too.
Just months ago, that seemed like a real energy-security vulnerability to some in the government. Does it still? Does it matter that Michigan Governor Gretchen Whitmer, citing concerns of a spill in the Straits of Mackinac, has engaged in a nearly five-year-long legal battle to shut Line 5?
Building a pipeline to carry bitumen to Eastern Canada would have its share of issues, too. TC Energy cancelled its Energy East pipeline proposal in 2017. Quebec Premier François Legault, who has recently expressed openness to pipelines, said Monday his province would have to approve any such project.
No oil pipeline project has a backer yet. Ms. Smith insisted that a pipeline company would come forward if the federal government killed some of its environmental regulation, but none have yet expressed real interest.
The 'grand bargain' that Ms. Smith read into Mr. Carney's words isn't concrete, either. But it now seems that in the mind of Mr. Carney, a future oil pipeline will flow to the Pacific.