As the Alberta government’s efforts to get a new oil pipeline built to the West Coast took some major leaps forward over the past week, B.C. Premier David Eby seemed to be on the defensive — though he may actually have some real bargaining power.
The idea of a new pipeline to the B.C. coast was thrust into the spotlight in November when Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a memorandum of understanding that committed the federal government to supporting a pipeline if Alberta met certain climate goals and other conditions.
Then they signed another agreement on May 15 that weakened those climate goals by imposing a less stringent carbon pricing scheme.
While it is still many crucial steps away from becoming a reality and the business case remains dubious, this latest deal, combined with a pressure campaign by the prime minister, has suddenly increased the chances that a new pipeline could actually go ahead.
“I wouldn’t put odds on it, but they’re higher than they were eight days ago,” said Kathryn Harrison, a University of British Columbia political science professor and expert on federal-provincial relations and climate politics.
Some new flexibility might also help the deal get done. While Smith has long championed a northern route to Prince Rupert, which has a deepwater port and is a shorter sail to Asian markets than Vancouver, she recently signalled she may be open to a less controversial southern route alongside the existing Trans Mountain pipeline.
Premier David Eby’s initial response to the May 15 agreement was to denounce the deal and reiterate his opposition to ending the ban on oil tankers docking in Prince Rupert and other regional ports.
But then he met with Carney directly, telling reporters beforehand he had agreed to “negotiations” on B.C. priorities.
And even as he publicly presses the case to abandon plans for a northern pipeline that would require ending the tanker restrictions, Harrison pointed out that Eby was “notably silent” about a new southern pipeline.
“He didn’t say he was embracing it, but he didn’t say he was opposing it,” she said.
In comments since, he has kept his cards close to his chest – and seems to be keeping his options open.
“My goal was to convince the Prime Minister to give the same level of attention and investment to B.C. projects as he’s giving to Alberta, and we have a shared vision for this country,” he said when asked about a southern pipeline route.
Placating Alberta separatist sentiment
Simultaneous to all the pipeline talk, the Alberta separatist movement is pushing for a referendum. Smith has now decided this should be put to a vote — a referendum on a referendum. The federal government has an obvious interest in neutralizing this effort.
Tom Gunton, a former B.C. deputy minister in the 1990s who now heads Simon Fraser University’s Resource and Environmental Planning Program, says it appears Carney is using the pipeline to placate Smith amidst this separatist talk. He thinks that is a political miscalculation.
“Negotiating a special deal with one of the provinces without engaging other provinces in negotiations creates some mistrust,” he said. “Not the best way to go about it.”
Eby might now be trying to cash in on this mistake by pushing for more federal funding for liquefied natural gas and critical minerals projects as a “quid pro quo” for supporting a new pipeline, Harrison says.
“In particular, LNG Canada Phase 2 and the Ksi Lisims project, both of which are on the [federal government’s] major projects list, neither of which has yet to receive a final investment decision,” she said.
But the question remains if a new oil pipeline is even feasible. Gunton thinks the lack of a business case means it won’t get built, and the only reason it remains in the spotlight is that it has become such a symbol for Alberta.
“There is not one shred of evidence that has been put forward by Alberta or anyone that you need this million-barrel pipeline in addition to all the other pipeline expansions that are ongoing,” he said.
He sees the world as turning a corner on fossil fuels, and that this is only accelerating as Asian countries suffer from the oil price and supply shocks resulting from the war in Iran.
Gunton reckons Eby is pushing for one of several options that he says make more economic and environmental sense than a new pipeline. This is probably where the “negotiations” started.
“This particular pipeline is probably the most controversial project that the prime minister could push,” he said.
Other options include expansion plans for Enbridge’s Alberta-U.S. pipeline system, which is already underway, optimization of the Trans Mountain pipeline, which Eby’s government has said it supports, or the Keystone XL pipeline, which U.S. President Donald Trump wants to revive.
Gunton estimates the first two options combined could provide 1.1 million barrels per day, with Keystone doubling that. That is compared to about 1 million per day from a new pipeline to the West Coast. All these options far exceed the amount of oil Gunton projects that Alberta can produce in the Oil Sands.
“And the most optimistic scenario of increased production in Alberta is about just under 800,000,” he said. “It’s probably more likely to be 400,000.”
Harrison adds that Carney is rolling back climate policy and potentially undermining relations with B.C. for a project that would lock in the Canadian economy’s reliance on fossil fuels.
But despite Eby’s attempts at negotiation, Harrison points out that when fighting pipelines, B.C. is not in a strong position.
“One of the things we learned through the Trans Mountain Expansion project saga is that B.C. doesn’t have a veto over an oil pipeline,” she said. “So that’s got to be one of the things on Premier Eby’s mind.”
This does not mean opposition, particularly from Indigenous groups such as those opposing any exemption to the North Coast tanker restrictions, wouldn’t have an impact.
While groups opposed to the Trans Mountain Expansion were unable to stop it 10 years ago, new laws have since been enacted that could change the legal picture, such as the Declaration on the Rights of Indigenous Peoples Act.
“That creates investor uncertainty, which is poison in the case of really big infrastructure investments,” Harrison said.