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Canada’s Prime Minister Mark Carney has struck a deal for a new pipeline carrying a million barrels of oil a day to Canada’s west coast in a bid to pivot away from an over-reliance on the US economy.
On Thursday, Carney announced a Memorandum of Understanding with the province of Alberta’s Premier, Danielle Smith, that lays the groundwork for a 1,100km pipeline project connecting its northern oil sands region to the coast.
“We will make Canada an energy superpower, drive down our emissions and diversify our export markets. We want to build big things, and we’re building bigger and faster together,” Carney said in Calgary.
The pipeline, which will facilitate Canadian oil exports to Asia, is part of Carney’s effort to recalibrate the country’s economy after US President Donald Trump launched a trade war that has hit the highly integrated North American market.
Canada supplies about 60 per cent of US oil imports, or about 4mn barrels a day. Most of it comes from the giant bitumen-rich oil sands of northern Alberta, home to the world’s third-largest reserve of oil.
Since taking office in April Carney, once at the vanguard of renewable energy financing, has courted Alberta’s fossil fuel industry as part of a “grand bargain” in response to Washington’s trade hostilities and devastating tariffs.
The project is likely to face a host of legal challenges. “Securing support from affected Indigenous governments and the province of British Columbia will also be key to getting a pipeline built without extended legal disputes,” said Calgary-based lawyer Jeremy Barretto, co-chair of the national major projects team at Cassels law firm.
The agreement includes a potential “adjustment” to a ban on crude tankers off northern British Columbia’s coast — where the pipeline would terminate — although no details were provided. Reversing the policy will be critical to securing the project’s success.
Marilyn Slett, president of the coastal First Nations Great Bear Initiative and Chief of the Heiltsuk Nation, condemned both provincial and federal governments for failing to consult indigenous groups.
“We will never allow our coast to be put at risk of a catastrophic oil spill,” she said, adding: “This pipeline project will never happen.”
According to the agreement, emissions from the increase in oil production associated with the project will be offset by the Pathways Alliance, a C$16.5bn (US$11.7bn) carbon capture and storage project planned in Alberta.
The province has agreed to lower methane emissions by 75 per cent over the next 10 years, while Carney’s government has said it will not implement an oil and gas emissions cap set by his predecessor Justin Trudeau.
Environmental groups have condemned the agreement. “Unfortunately, Carney’s obsession with building new oil and gas infrastructure will only further entrench Canada in Trump’s dream of an uncompetitive, volatile and fossil-fuelled North American economy,” said Caroline Brouillette, executive director, Climate Action Network Canada.
An existing pipeline has transported approximately 890,000 bpd of crude from Alberta to Asia via Vancouver since May 2024.
Smith has long called for a second pipeline to expand Asian markets but British Columbia Premier David Eby has voiced strong opposition. He was excluded from the recent negotiations with Ottawa, which he condemned as “unacceptable”.
