Smith’s pipeline clears another hurdle after deal with Ottawa. Now, who will build it?

Wanted: a buck private keep company ready to practice billions of dollars to establish a john major oil pipeline.

The prime minister himself says he is on the lookout and even quipped on Thursday to a Calgary business crowd, “If you know of one in the room, come see us afterwards.”

Mark Carney was delivering a speech when he made the offhand comment, following a series of events in the city after joining Alberta Premier Danielle Smith in signing a preliminary deal to pursue a new oil export pipeline from Alberta to the North Coast of British Columbia.

The agreement also calls for developing nuclear power, pursuing AI data centres and supporting a multi-billion-dollar carbon-capture project, among other details.

For its part, the federal government is providing exceptions to many environmental policies such as the B.C. Tanker ban and the oilpatch emissions cap. 

That’s why the spotlight is now on Smith to see if she can actually get her pipeline idea off the ground.

She campaigned for Carney to ditch several environmental policies and while he didn’t outright scrap them, he did enough to put the ball in her court to see if a new pipeline can be developed and built.

So far, a few hurdles have been overcome on a long and complicated road ahead.

Speaking to a packed crowd of energy executives, Carney was greeted at the Calgary Chamber of Commerce with multiple standing ovations. 

It’s a scene that would’ve been hard to picture a year ago, when his predecessor Justin Trudeau was sinking in the polls and locked in a battle with Smith over environmental laws. 

Carney gets a standing ovation in Calgary after signing energy MOU

Times have certainly changed.  

If anyone in the crowd had been asked a year ago if there was any chance of Alberta’s premier convincing the prime minister to soften major environmental laws as part of deal to pave the way for a new pipeline, "none of us would have taken that bet,” said Deborah Yedlin, president of the Calgary Chamber of Commerce. 

Last month, Smith unveiled plans for the Alberta government to develop and submit a formal application to the federal major projects office for an oil pipeline. 

Helping the government is a "technical advisory group" that includes three major pipeline companies — Enbridge, South Bow and Trans Mountain — although those companies would not necessarily be involved if the project were to proceed.

That's the main hurdle facing a new pipeline west: the lack of a private-sector proponent willing to step up and build the thing. 

Right now, the potential pipeline has no route and no name (though the Alberta government plans to help with some of that). Even with the help of the Major Projects Office, the project would have to make its way through the regulatory process and various consultations. 

Plus, it bears repeating: even with the support of Ottawa, the desire for a new pipeline isn’t exactly universal.

All of that could be daunting for any company planning to embark on the years-long process of building a new pipeline.

Cost is another major hurdle. Companies are likely still haunted by the Trans Mountain Pipeline Expansion project, whose costs ballooned from an estimated $7.3 billion to more than $34 billion by the time all was said and done.

“I don't think any private sponsor is going to be prepared to just have a blank cheque associated with this project,” said Randy Ollenberger, managing director with BMO Capital Markets in Calgary.

Pipeline companies might even want some sort of financial commitment from either Alberta or Ottawa to backstop any cost overruns outside a company’s control before they agree to put their name on a project, he said. 

“I think you’re going to find proponents interested in moving forward,” he said.

In order for a new oil pipeline to be built, Ottawa does have some requirements — notably, the Pathways project.

The Pathways Alliance is a consortium of oilsands companies that have pledged to reach net zero. The centerpiece of their plan is a project that would capture emissions from 20 oilsands facilities in northern Alberta and move them 400 kilometres by pipeline to a terminal near Cold Lake, Alta., where they would be stored underground. 

The companies behind the project haven’t yet made a final investment decision, but experts believe the language in the MOU around carbon pricing should be enough to push the project toward the starting line. 

“It gets it very close, if not over the line,” said Michael Bernstein, CEO of the climate think-tank Clean Prosperity. He said the MOU should provide assurances to businesses about the long-term future of carbon pricing, in order to make projects like Pathways worth the investment. 

But Pathways is its own major project that comes with its own set of hurdles. That could include opposition from Indigenous communities. 

“It’s frustrating when people are having talks and we’re absent from the table,” said Jacko. €œAt the end of the day, I just want my people to be safe.”

Former Liberal MP and oilsands executive Martha Hall Findlay worked on the Pathways project for several years and is now convinced a private company will step up to build Alberta’s proposed pipeline.

“There’s way too much money involved for that not to happen,” she said, pointing to how the federal government is providing the comfort a pipeline company would need to take on such a project.

Reporter/Editor

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