Canada’s prime minister and Alberta’s premier sign pipeline deal that could reverse oil tanker ban

Canadian Prime Minister Mark Carney and Alberta Premier Danielle Smith have signed a memorandum of understanding to pursue a new pipeline project that would transport oil to Canada’s Pacific Coast, potentially opening lucrative Asian markets for Canadian crude exports.

The agreement, announced Thursday in Toronto, aims to reduce Canada’s heavy dependence on the United States as its primary oil customer. The deal includes provisions to adjust an existing oil tanker ban along parts of the British Columbia coast to accommodate the proposed pipeline.

“Over 95% of all our energy exports went to the States. This tight interdependence – once a strength – is now a weakness,” Carney said during the announcement. The Prime Minister has set an ambitious target of doubling Canada’s non-U.S. exports within the next decade, citing growing concerns about American tariffs chilling investment in Canada.

The announcement has already triggered political fallout within Carney’s Liberal government. Steven Guilbeault, who served as minister of culture and previously as environment minister, resigned from cabinet immediately following the announcement, though he will remain a Liberal Member of Parliament.

In his resignation statement, Guilbeault, a career environmentalist before entering politics, expressed strong opposition to the agreement, highlighting concerns about the pipeline potentially crossing the ecologically sensitive Great Bear Rainforest and increasing risks of oil tanker spills along British Columbia’s coast.

Premier Smith framed the agreement as a crucial step toward energy independence, stating it could facilitate the export of more than one million barrels of oil per day primarily to Asian markets. “Our province and our country are no longer dependent on just one customer to buy our most valuable resource,” Smith said.

Northern Alberta’s oil sands represent one of the world’s largest oil reserves, with approximately 164 billion barrels of proven reserves. However, limited pipeline capacity has forced producers to sell to U.S. refineries at significant discounts compared to global market prices.

Carney characterized the memorandum as “the start of a process” rather than a finalized project. “We have created some of the necessary conditions for this to happen but there is a lot more work to do,” he noted, adding that the pipeline would not proceed without private sector investment.

The agreement faces substantial hurdles, particularly from British Columbia’s government and coastal First Nations communities. British Columbia Premier David Eby expressed skepticism about the project’s viability, describing it as a “distraction” lacking corporate backing, financial resources, and support from coastal indigenous communities.

“What this is about is the fact that this project has no company that’s advancing it. It’s got no money. It’s got no coastal First Nations support,” Eby said, while acknowledging the federal government’s authority to impose the pipeline if it chose to do so.

Coastal First Nations President Marilyn Slett issued a stronger rebuke: “We have zero interest in co-ownership or economic benefits of a project that has the potential to destroy our way of life and everything we have built on the coast.”

This isn’t Canada’s first attempt to diversify its oil export markets. In 2016, then-Prime Minister Justin Trudeau rejected the Northern Gateway pipeline project that would have transported 525,000 barrels of oil daily through the Great Bear Rainforest to British Columbia’s northwest coast. That pipeline was primarily intended to deliver oil to China and other Asian markets.

In the same year, Trudeau did approve another controversial pipeline from Alberta to British Columbia’s coast, but the federal government ultimately had to purchase and complete the project due to opposition from environmental and indigenous groups.

The new agreement pairs the pipeline project with a proposed carbon capture initiative, with government officials emphasizing that both projects must be developed simultaneously. Under the terms of the deal, Ottawa and Alberta will work with companies to identify new emissions-reduction projects by April 1, with implementation slated to begin in 2027.