The analysts at CIBC Capital Markets have expressed skepticism regarding the private sector's ability to spearhead a new pipeline project aimed at transporting oilsands bitumen from Alberta to a port on British Columbia's north coast for export to Asia. Their report highlights that as long as the British Columbia government and First Nations communities remain opposed to the project, significant advancements are unlikely.
In their analysis, the analysts pointed out that companies hoping to develop such a pipeline would need to navigate the complexities of the constitutional duty to consult with Indigenous groups, as well as contend with new federal legislation designed to expedite infrastructure projects deemed essential to national interests. This prospect remains uncertain, particularly given the current political climate in British Columbia.
The Alberta government is taking proactive steps by funding preliminary work on an application to the newly established Major Projects Office. This initiative represents an effort to facilitate a pipeline that could potentially enhance Alberta's economic interests. Additionally, a recent energy accord between the Alberta and federal governments includes provisions to mitigate the existing ban on oil tankers in the area, but only "if necessary," and aims to fortify the industrial carbon pricing framework.
CIBC analysts anticipate that there may be financial measures introduced to protect any project proponent from the burdens of potential, prolonged legal disputes that could arise in opposition to the pipeline. However, they caution that oilsands producers are unlikely to accelerate their production levels in the immediate future, despite the memorandum of understanding indicating that they will not be subjected to a federal emissions cap.
The report underscores the analysts' view of a West Coast pipeline as vital for Canada's economic sovereignty, but they also acknowledge the significant time required to bring such a project to fruition. Given the challenges posed by legal hurdles and the need for comprehensive consultations with Indigenous communities, the analysts suggest that it may take years before any tangible progress is seen on this front.
Overall, while the Alberta government shows intent and preparation towards constructing a new pipeline for oilsands exports, the prevailing opposition from British Columbia's government and First Nations communities presents a formidable barrier that necessitates careful consideration and engagement.
