Tariff talk reopens discussion on pipelines running east and west

Talk of resurrecting pipeline projects got new life after Premier Danielle Smith pitched more east-to-west pipelines in response to U.S. President Donald Trump’s tariff threats.

Smith suggested it is time to revisit the Northern Gateway pipeline, which would have brought diluted bitumen from the Athabasca oilsands to Kitimat and would have sent natural gas condensate east, and the Energy East pipeline project, which would have a converted natural gas pipeline carrying diluted bitumen from Hardisty in Alberta to New Brunswick, with stops in between.

Smith met with Prime Minister Justin Trudeau and the other premiers yesterday about the threat of tariffs, calling discussions “more positive this week,” as there is a growing consensus about building east and west pipelines and securing consent before cutting off trade to the U.S..

Union of B.C. Indian Chiefs president Grand Chief Stewart Phillip walked back earlier comments that suggested he may be open to one such pipeline project in light of threats by Trump.

“I do not support resuscitating dead projects such as the failed Northern Gateway pipeline, which would have been an absolute disaster for our lands and waters,” Phillip said in a statement yesterday. “I sincerely apologize for any confusion on this point.”

Philip told reporters on Tuesday that if Canada doesn’t build infrastructure like the Northern Gateway pipeline, Trump will, and he’ll do it with no consideration for rule of law or the environment.

“We are staring into the abyss of uncertainty,” Phillip said.

The original proponent, Enbridge, also has no plans to revisit the proposal.

Enbridge spokesperson Jesse Semko told Alberta Today in a statement that the company has no plans to develop Northern Gateway.

“Our current effort is focused on leveraging our pipeline in the ground and our existing rights of way,” Semko said. “There’s lots of capacity there that is efficient and less disruptive to communities and the environment.”

B.C. Premier David Eby called talk of Northern Gateway “speculative.”

Alberta NDP Leader Naheed Nenshi said that in his time as Calgary mayor he advocated for the Trans Mountain pipeline expansion project, as well as for Energy East.

“I’ve always been in favour of more export capacity,” he told reporters.

But he took a shot at the UCP, asking why they did not do more to lay the groundwork for pipeline projects in the six years they have been in government.

He said that in his conversations with industry he found no interest in building Keystone XL, Energy East or Northern Gateway, and that projects cannot be built overnight.

Alberta Today reached out to Smith’s office for clarification on if any proponents have expressed interest or if any pipeline project would have government backing.

TC Energy withdrew its application for the Energy East project in October 2017. TC Energy, the original proponent of Energy East, spun off its liquid pipeline business to South Bow last year. Alberta Today reached out to South Bow for comment.

The federal government directed the National Energy Board to dismiss the $1.6-billion Northern Gateway pipeline project in 2016, over concerns that crude oil tanker traffic would harm sensitive ecosystems.

Business Council of Alberta president Adam Legge said trade uncertainty with the U.S. should serve as a “wake-up call” and renewed calls for the federal government to reverse energy caps, electricity regulations and capital-gains tax changes, and to accelerate infrastructure projects such as pipelines and port expansion.

Legge told Alberta Today that the threat of Trump’s tariffs has exposed the danger of being too reliant on one market.

“We’ve made our bed here on this, and the president is just exploiting poor decisions and poor choices that were made over the past 10 years,” Legge said.

He added that without regulatory change, including a repeal of the federal Impact Assessment Act, “no one’s going to come forward” to build new projects.

Legge made the pitch for LNG as an emissions-reduction strategy in jurisdictions like India. He said the ideal destination for Canadian oil and gas products will be Asia, with potential customers in South Korea and Japan.

Speaking to a change of tune from Phillips, Legge said that since the Northern Gateway project ended, there have been improvements with Indigenous involvement, including equity partnerships. He pointed to the Cedar LNG project, which is the first majority-Indigenous owned LNG export facility in Canada in partnership with the Haisla Nation, as well as Enbridge’s partnership with the Athabasca pipeline coalition.

“It’s not just a one-time payment,” Legge said. “It’s an ongoing equity partnership that gives them dividends and income on an ongoing basis.”

Smith amplified an opinion piece by University of Calgary economist Trevor Tombe, who argued in The Hub that restricting oil exports is a bad idea and that Canada should instead address the trade imbalance.

“Cutting off or taxing oil exports to the U.S. would be a disaster for Canada as a country for the many reasons outlined in the article,” Smith said on social media.

“Instead, Canada should focus on addressing safety concerns at the border including illegal migration and drug trafficking; and on meeting our military spending commitments in defending our nation and continent.

“We can also work to sell more to and buy more from the U.S. and address the trade balance by working to strengthen our own economy, approving projects that grow our economy, and improving our investment climate.”