Alberta looks to change ‘risk profile’ to boost oil and gas pipeline exports to U.S., premier says

Alberta’s government is actively seeking ways to encourage pipeline companies to increase capacity and boost the province’s oil and gas export volumes to the United States. Premier Danielle Smith has made it clear that the government is not looking to provide direct subsidies for a cross-border pipeline project. Instead, they are exploring ways to de-risk potential private sector investments in the sector.

Smith stated that they are looking to establish connections with the United States to gauge their interest in supporting increased oil and gas exports. One potential strategy mentioned by Smith is to involve American pipeline companies as partners with Alberta-based companies to mitigate risks associated with such projects.

The province of Alberta is particularly interested in expanding pipeline access to the U.S. following the election of President Donald Trump, who has been a strong advocate for the oil and gas industry. Trump had previously supported TC Energy Corp.’s Keystone XL pipeline project, which was ultimately canceled by President Joe Biden on environmental grounds.

Although TC Energy is no longer the owner of the Keystone pipeline network, discussions have been initiated with the company to explore the possibility of reviving the project or finding alternative ways to increase oil and gas exports to the U.S. TC Energy’s CEO, Francois Poirier, confirmed that the Alberta government has been in contact with the company to discuss these opportunities.

In an effort to support the transportation of Canadian crude oil to meet U.S. demand, the Alberta government had previously agreed to invest approximately $1.5 billion in equity in the Keystone XL project. However, Smith emphasized that there are multiple avenues to boost oil and gas exports that do not involve direct financial contributions from the government.

Smith highlighted the importance of utilizing existing pipeline infrastructure, such as rights-of-way and access points, to expand exports through methods like loops, compression, or twinning of existing pipelines. By exploring these options, the province aims to provide pipeline companies with the confidence that expanded capacity will be utilized to accommodate Alberta’s growing oil output.

Alberta has seen record levels of oil production in 2024, driven by projects like the Trans Mountain pipeline expansion. This project, which tripled the capacity of the existing pipeline, has significantly increased the shipping capability from Alberta to British Columbia’s West Coast. Analysts predict continued production growth in the coming years, with the potential for Alberta to double its oil output by 2050.

Enbridge Inc., a Calgary-based company, has also initiated talks with customers to expand its Mainline pipeline network to accommodate the growing volumes of Canadian oil output. The Mainline system is the largest pipeline network in North America, facilitating the transport of crude from Western Canada to markets in Eastern Canada and the U.S. Midwest. The company is considering a small expansion to add incremental capacity along the existing pipeline network.

Overall, Alberta’s efforts to enhance pipeline capacity and increase oil and gas exports to the United States reflect the province’s commitment to leveraging opportunities in the energy sector while balancing environmental considerations and economic growth.