Resurrection of Pipeline Proposals: A Look at Revived Energy Projects

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Pipeline projects once deemed defunct are being revived with new plans and routes, spearheaded by political leaders. This article explores the implications of these resuscitated projects for the Canadian energy sector.

CALGARY, ALTA. — A number of pipeline initiatives that were previously considered inactive are now being reintroduced under new branding, proponents, and routes, largely driven by political figures instead of the private sector. This resurgence raises significant interest within the construction and energy sectors.
One notable proposal is the revival of a plan to transport oilsands crude from Hardisty, Alberta, to Sarnia, Ontario, covering a distance of 3,300 kilometers. Ontario Premier Doug Ford remarked on the improbability of such a project being realized, indicating that it would transport an initial 500,000 barrels of crude. This new initiative comes as a twist on TransCanada Corp.'s earlier Energy East pipeline proposal, which sought to convert part of a gas pipeline for oil transport, aimed at delivering crude to eastern refineries and export terminals in Quebec and New Brunswick.
The original Energy East project, which faced significant opposition from environmental groups and the Quebec government, was ultimately abandoned in 2017 due to changing market conditions and low crude oil prices. The new endeavor, referred to as the Northern Shield Energy Corridor, aims to bypass Quebec initially, with Alberta Premier Danielle Smith suggesting the potential for expansion to 800,000 barrels per day and possible shipments to Europe. However, the Ontario government is currently conducting a feasibility study to determine the financial aspects and potential private sector involvement in the Northern Shield project.
In the west, the Alberta government recently submitted an application to the federal major projects office for a new pipeline to the West Coast. Although Premier Smith had expressed interest in a northern route to a British Columbia port, the federal government has maintained a ban on oil tanker loading in northern waters, prompting Alberta to propose a southern route that closely follows the existing Trans Mountain pipeline.
This transition highlights a cautionary tale from the past: Enbridge Inc.’s Northern Gateway pipeline application faced severe opposition from Indigenous communities and the British Columbia government. Initially approved in 2014, the project was ultimately canceled after the Federal Court of Appeal ruled that the government failed to adequately consult with Indigenous groups.
The federal government, under former Prime Minister Justin Trudeau, subsequently killed the Northern Gateway project but approved an alternative Enbridge project aimed at U.S. markets and the expansion of the Trans Mountain pipeline, which is now federally owned. The Crown corporation managing this pipeline is set to lead the development and operation of the new million-barrel-a-day project unveiled recently, with Pembina Pipeline Corp. expected to hold a 10 percent stake during construction, potentially increasing to 20 percent once operational.
In the south, South Bow Corp., a spinoff from TC Energy, has shifted focus from the contentious Keystone XL proposal. Originally proposed in 2008, Keystone XL was intended to enhance an existing pipeline route to U.S. refineries but faced significant opposition from environmental activists. The project was revived and subsequently canceled multiple times by different U.S. administrations. South Bow is currently pursuing its Prairie Connector proposal, which seeks to connect Hardisty, Alta., to the Canada-U.S. border, leveraging existing pipeline infrastructure intended for Keystone XL. The company announced it received binding commitments for transportation service and plans to make a final investment decision in the coming year.
During a recent news conference, Premier Smith was questioned about how oilsands companies could produce sufficient crude to meet the demands of multiple pipeline expansions currently underway. She confidently remarked that the industry had previously reached such production levels a decade ago and suggested it could do so again.

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