Will a new Alberta oil pipeline to Vancouver pay off?

Everything’s coming up Carney

Ottawa didn't stumble into the southern route by accident. This was a case of everything’s coming up Carney .

For years, Smith was pushing hard for a new oil pipeline to B.C.’s northern coast right up until Carney — standing alongside B.C. Premier David Eby — announced the pesky federal tanker ban was staying put, effectively making that route impossible.

But as it turns out, the Vancouver Fraser Port Authority was already planning to spend billions on its Roberts Bank Terminal 2 (RBT2) expansion — a separate, previously announced container-shipping project — with construction starting in 2027.

Located in Delta, a suburb just south of Vancouver, RBT2 has been over a decade in the making.

That’s where everything fell into place for Carney. He gets credit for announcing $10 billion for RBT2, essentially laying the foundation to build a pipeline terminal on top of the container port expansion, while B.C. avoids juggling two massive construction and environmental review processes in both the north and south at the same time.

Delta makes all kinds of sense, anyway. The new pipeline would follow the route of the existing Trans Mountain Pipeline to Roberts Bank, which can handle VLCCs, the very large crude carriers that make a pipeline project more sustainable at scale.

And whether we like it or not, the industrial footprint at Roberts Bank was going to change anyway, even without the pipeline. Because the disruption is baked in, it’s better to consolidate the changes in one location rather than duplicating them around the province.

Zoom out to the national level and this project has the potential to be, as Energy Minister Tim Hodgson says , “a good investment for Canadian taxpayers.”

Pipelines generate wide-scale national benefits , including jobs, royalties and, perhaps crucially, energy security at a time when Canada’s relationship with the U.S. is fraying.

For Smith, the case is simple: after years of frustration over limited access to ocean trade routes, a federally owned partner in Trans Mountain, along with a private one, Pembina Pipeline, is stepping up to build the infrastructure needed to get oil sands crude to Asian buyers — but at world prices, instead of discounted North American ones.

The case for Eby is a little more complicated, given the government has an interest in protecting the coastline from environmental risks. But in return for playing ball, B.C. gets a small fortune from Carney.

We’re talking a share of the royalties, a role in overseeing the project, plus billions of investment in much-needed infrastructure projects, including RBT2, the Massey Tunnel replacement, North Coast Transmission Line and expansion of the Red Chris Mine. It’s something like $20 billion in federal funding.

But most importantly, Eby gets his wish and the tanker ban on the north coast stays intact. Without it, B.C.’s Coastal First Nations were likely to withdraw their support for any other big projects on the table, potentially sinking Eby politically.

In the case of Carney, what ties it all together is the Pathways Project, a carbon capture and storage system between the federal government, Alberta and five major oil producers, which the prime minister says will cut 16 million tonnes of emissions a year.

The plan for the Pathways Project, as presented on paper, is to make sure the pipeline helps support what is meant to be the biggest carbon capture project in the world to help reduce those emissions overall.

Whether that math actually holds is a separate question. But as policy, this allows Carney to say yes to Alberta — without saying no to the climate file.

Carney’s big win is he ended up finding a way for two provinces and Ottawa to work together. If that continues, Canada could see some serious economic growth for decades to come.