Pipeline
July 14, 2026
I’m all in favour of governments investing in economic opportunities but this west coast pipeline is just politics. Last year, Mark Carney said a pipeline will only happen if the private sector pays for it, but now it seems taxpayers will pay. We are told $35-44 billion, but this new pipeline has much larger pipe and more powerful motors than the TMX, so I think we will pay much more.
Part of the deal was that the oil industry would install a carbon capture and storage system but The Hub expects we’ll pick up $20 billion in cost for that too. (New West Coast pipeline could cost over $100 billion in overruns, raising concerns about ‘Laurentian Capitalism’ spreading to Alberta). And The Hub expects there will be about $100 billion in cost overruns.
If this project makes sense, the private sector will take it on. The reality is that this pipeline makes no economic sense. Smith says that the oil will be sold to the growing market in Asia, but she knows that the Asia market is shrinking. The main Asian country with refining facility for our heavy sour crude is China, and China is installing renewable energy quickly to eliminate the need for imported oil. China says their oil consumption will drop this year by 5 per cent. (PetroChina forecasts Chinese oil consumption will drop 4.9 per cent this year – Reuters). It is shrinking, not growing. If there is any market for our oil by the time the pipeline is finished, we will be competing with Saudi Arabia, who provide most of the heavy crude to China now.
Unfortunately, according to the Pembina Institute (West Coast Pipeline Deal Is a Massive Gift to the Oil Industry, Alberta – Energi Media), Saudi Arabia can produce heavy crude profitably for as little as $5/barrel, but for the oil sands the break even point is about $35/barrel.
To transport Saudi oil to China costs about
$2/barrel and for Alberta oil its about $18/barrel. It appears that the only way any oil will move through that pipeline is if it is heavily subsidized by taxpayers.
It appears to make no sense, so why are we doing this. Well, some separatists say we should vote to separate to send Ottawa a message.
I think they have got their wish. Carney appears to be willing to throw a ridiculous amount of Canadian taxpayers’ money at this to show that Ottawa can satisfy Alberta. And Smith seems willing to throw a ridiculous amount of Alberta taxpayers’ money at this to show that she can get Ottawa to do what she wants.
In my opinion, the big winners – oil companies (many foreign). The big losers – Canadian taxpayers. It should be interesting to see how this plays out.
Rob Hill, Camrose
I’m all in favour of governments investing in economic opportunities but this west coast pipeline is just politics. Last year, Mark Carney said a pipeline will only happen if the private sector pays for it, but now it seems taxpayers will pay. We are told $35-44 billion, but this new pipeline has much larger pipe and more powerful motors than the TMX, so I think we will pay much more.
Part of the deal was that the oil industry would install a carbon capture and storage system but The Hub expects we’ll pick up $20 billion in cost for that too. (New West Coast pipeline could cost over $100 billion in overruns, raising concerns about ‘Laurentian Capitalism’ spreading to Alberta). And The Hub expects there will be about $100 billion in cost overruns.
If this project makes sense, the private sector will take it on. The reality is that this pipeline makes no economic sense. Smith says that the oil will be sold to the growing market in Asia, but she knows that the Asia market is shrinking. The main Asian country with refining facility for our heavy sour crude is China, and China is installing renewable energy quickly to eliminate the need for imported oil. China says their oil consumption will drop this year by 5 per cent. (PetroChina forecasts Chinese oil consumption will drop 4.9 per cent this year – Reuters). It is shrinking, not growing. If there is any market for our oil by the time the pipeline is finished, we will be competing with Saudi Arabia, who provide most of the heavy crude to China now.
Unfortunately, according to the Pembina Institute (West Coast Pipeline Deal Is a Massive Gift to the Oil Industry, Alberta – Energi Media), Saudi Arabia can produce heavy crude profitably for as little as $5/barrel, but for the oil sands the break even point is about $35/barrel.
To transport Saudi oil to China costs about
$2/barrel and for Alberta oil its about $18/barrel. It appears that the only way any oil will move through that pipeline is if it is heavily subsidized by taxpayers.
It appears to make no sense, so why are we doing this. Well, some separatists say we should vote to separate to send Ottawa a message.
I think they have got their wish. Carney appears to be willing to throw a ridiculous amount of Canadian taxpayers’ money at this to show that Ottawa can satisfy Alberta. And Smith seems willing to throw a ridiculous amount of Alberta taxpayers’ money at this to show that she can get Ottawa to do what she wants.
In my opinion, the big winners – oil companies (many foreign). The big losers – Canadian taxpayers. It should be interesting to see how this plays out.
Rob Hill, Camrose