Canada Unveils New Pipeline to Cut Reliance on U.S. Oil Routes

A new oil pipeline could connect eastern and western Canada as the oil-rich country seeks to become more self-reliant and reduce its energy dependence on the United States. However, not everyone is in support of the project, which is at odds with Canada's climate targets. Alberta is home to vast oil reserves, totalling around 158.9 billion barrels. At present, the United States is the main importer of Canadian crude, which accounted for 63.4 per cent of U.S. crude imports in 2025. In recent years, as Canada's federal government has favoured plans for a green transition, thereby hindering the expansion of the oil industry, there have been calls from a minority of Alberta residents to hold a referendum on a potential separation from Canada. The governments of Alberta and Canada have now joined together to propose a new oil pipeline capable of transporting oil from western to eastern Canada, to reduce reliance on U.S. infrastructure and develop new export markets. The proposal reflects a long-discussed idea that was eventually abandoned almost a decade ago. At present, oil is transported from Alberta to Ontario via the United States, and the state of Michigan has previously threatened to shut down that route, thereby putting Canada's energy security at risk. Alberta's Premier, Danielle Smith, said the proposed 3,300-kilometre oil pipeline would start in Hardisty, Alberta, and traverse Saskatchewan, Manitoba, and northern Ontario before heading south to Sarnia, Ontario, and would be capable of transporting up to 500,000 bpd of crude a day, with a future potential of up to 800,000 bpd. Once developed, the pipeline could potentially be extended to Canada's Atlantic coast to open new export routes to Europe. Smith has long been an advocate of the pipeline and of broader oil industry expansion. [GooglePreferredSource] Ontario's Energy Minister Stephen Lecce explained, "50 per cent of oil imports into Ontario run through a pipeline that cuts through the U.S." Lecce added, "It is clear we need a sovereign pipeline route that connects Alberta crude oil to Sarnia the country's largest refinery and petrochemical hub." Canada's Prime Minister, Mark Carney, announced during a July visit to Alberta C$150 billion in investments for Alberta and British Columbia. The investments will include the expansion of a port in Vancouver and the development of new power infrastructure for a new liquefied natural gas LNG terminal. In addition, Carney outlined plans for a new oil pipeline. Carney stated that Canada and Alberta would be "equal partners" in the pipeline project, and there would be "a meaningful ownership stake for Indigenous communities", with consultations expected to commence immediately. He also said that he expected the project to support "substantial" methane reductions. Carney reassured the public that a longstanding federal ban on loading or unloading oil from ships on British Columbia's north coast would stay in place. The original pipeline project would have involved the development of a transport link across northern Canada. However, widespread opposition from Indigenous communities and leaders, due to the likely overturning of the tanker-loading ban, stopped this project from going forward. Canada's Culture Minister and former Environment Minister, Steven Guilbeault, announced he would leave the cabinet if the original pipeline were to go ahead. Oil firms were also reluctant to show support for the previous pipeline plan due to fears of staunch opposition by environmentalists and Indigenous groups. Now, it appears that British Columbia's Premier, David Eby, will not oppose the pipeline. Eby stated that the new agreement had robust safeguards and that residents would be "fairly compensated for the environmental risks we would take on any new pipeline project". Meanwhile, the president of the Coastal First Nations, Marilyn Slett, said that the news that the tanker ban would remain in place was positive. Slett stated, "British Columbians, Canadians and the First Nations who call this place home want this region to remain protected. There is no technology that can clean up an oil spill at sea, and a single oil spill could destroy our way of life." However, environmentalists have been critical of the plan due to climate change concerns and past failures of fossil fuel projects. The expansion of the Trans Mountain pipeline resulted in a significant cost overrun, and while it has become a strategically important piece of infrastructure, it remains uncertain whether taxpayers will ever recover the money invested in the project. There has long been discussion around the development of a new, wholly domestic oil pipeline in Canada that could boost the country's energy security and reduce reliance on the United States. However, opposition from a range of actors has previously thwarted these efforts. Now, a new pipeline proposal looks more promising than previous proposals. However, there are still major concerns around the development of new oil infrastructure during a time of energy transition and in the face of climate change concerns. By Felicity Bradstock for Oilprice.com