Canada fast-tracks Pacific oil pipeline to reduce US dependence as Alberta separation vote nears
TORONTO (AP) — Canadian Prime Minister Mark Carney on Thursday fast-tracked a proposed million-barrel-a-day oil pipeline to the Pacific Coast, a bid to reduce the country’s dependence on the United States and mend relations with oil-rich Alberta as separatists push for a referendum on leaving Canada.
Carney, appearing with Alberta Premier Danielle Smith in Fort McMurray in the heart of Canada’s oil sands, designated the pipeline, now called Pacific Link, a project of national interest under legislation his government enacted to accelerate major infrastructure projects.
A bid to keep Alberta in Canada
Alberta is holding a public vote on Oct. 19 on whether to hold a referendum on leaving Canada. Smith has long complained that Carney’s predecessor, Justin Trudeau, hindered Alberta’s energy industry and fueled separatist sentiment.
Smith said she would vote to keep Alberta in Canada and called the roughly 22% support for separation in a recent poll “still too high for my liking.”
“I don’t like the fact that that many of our fellow citizens have given up on Canada,” Smith said, adding that the pipeline was an example of how “cooperative federalism can work in action.”
Asked what message Albertans considering separation should take from the announcement, Carney said it demonstrated that “Canada is working” and showed what the country could achieve by acting together.
A pipeline to loosen the US grip
“Today, 90% of Alberta’s oil goes to the United States,” Carney said. “Pacific Link will materially reduce that dependence by allowing Canada to export an additional 1 million barrels a day to growing markets in Asia.”
Carney said Pacific Link was part of a broader effort to make Canada less dependent on the United States and achieve “greater strategic autonomy, so we can continue to live our lives as we choose.” Carney has set a goal of doubling Canada’s non-U.S. exports over the next decade.
The government said 90.1% of Canadian crude exports went to the U.S. last year, calling the country’s reliance on U.S.-bound infrastructure a “structural vulnerability.”
It said Pacific Link, combined with optimization of the Trans Mountain system, could reduce Canada’s fixed pipeline dependence on the U.S. from about 82%-83% of capacity to 65%-70%.
The push comes as U.S. President Donald Trump’s trade war and threats against Canadian sovereignty have prompted Carney to reduce Canada’s long-standing economic dependence on its southern neighbor.
The proposed 1,250-kilometer (775-mile) pipeline would run from Bruderheim, northeast of Edmonton, Alberta, to a deepwater port near Delta, British Columbia. It would largely follow the existing Trans Mountain corridor and load crude onto tankers bound for global markets.
Questions remain over money and opposition
The project is expected to cost $25 billion to $31 billion and still faces major questions about financing and whether producers will commit to using it.
The designation does not amount to final project approval. Carney said proponents still have to settle engineering, costs, environmental conditions and other requirements before a final decision to proceed.
The federal government and Alberta government are putting up roughly US$2.8 billion before the main private investor has committed its construction share.
Calgary-based Pembina Pipeline Corp. has a 10% economic interest in the project but has not yet put up its share of construction costs. A federal official said Pembina would decide whether to make that investment at or before a final investment decision.
Asked how much federal taxpayers could ultimately contribute to the project, Carney did not provide a figure but said, “The Canadian taxpayer is going to make a lot of money off this pipeline.”
An open season to determine how much pipeline capacity oil producers are willing to contract is expected next spring. Officials said there is significant interest but acknowledged that fast-tracking the project does not guarantee it will ultimately secure enough shippers or financing to proceed.
A senior government official said proving Canada can approve the project more quickly could draw additional private investment, while greater access to Asia would give Canadian oil producers more leverage by reducing their dependence on the U.S. market.
The official noted that the Trans Mountain expansion took 14 years from the project’s launch in 2010 until first oil flowed in 2024.
The pipeline also faces significant Indigenous and environmental concerns.
The government acknowledged that most Indigenous communities consulted were not prepared to support listing the project based on the information available, citing unanswered questions about routing, environmental effects, marine shipping and impacts on Aboriginal and treaty rights. Carney said the “real intensive consultation process will begin now.”
Canada, Alberta and the project owners have committed to offering Indigenous communities a minimum 10% ownership interest in the pipeline.
Carney said construction of the Pathways carbon-capture project would be a prerequisite for Pacific Link. The government says Pathways and other measures would reduce oil sands emissions by 16 million metric tons annually.
The government acknowledged, however, that the pipeline is expected to enable increased oil production and additional emissions.
Carney said the government wants final regulatory conditions in place by September 2027, clearing the way for construction. The pipeline is targeted to begin operating around 2032 or 2033.
