Alberta's proposed pipeline to Asia faces skepticism as overseas markets shift to renewable energy
The Canada-Alberta deal estimates the pipeline would cost $35.2 to $43.7 billion, but energy experts question whether Asian buyers will want Canadian oil as they transition to electric vehicles.
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Energy and environmental organizations are raising alarm about Alberta's newly announced plan to build a major oil pipeline to the West Coast, questioning whether overseas buyers will actually want the oil that flows through it.
The Canada-Alberta government partnership estimates the pipeline would cost $35.2 to $43.7 billion, with the federal and provincial governments remaining majority owners. The deal breaks an earlier promise from Prime Minister Mark Carney that the project would be privately financed.
Only one private company — Calgary-based Pembina Pipeline Corporation — has joined the project with a 10 per cent stake, and has not yet invested or pledged capital to build it.
"What we're seeing here is a pipeline being built for political reasons rather than economic reasons," said Chris Severson-Baker, executive director of the Pembina Institute, an energy think-tank. "A big part of this deal is to try to address the prime minister's concerns about national unity, which does not make the pipeline a good economic decision."
The hesitation reflects a broader shift underway in Asia, where countries are rapidly transitioning to electric vehicles and renewable energy. Chinese electric vehicle exports hit an all-time high in May — up 49 per cent from a year earlier — and more than half of new cars sold in China are now electric. Meanwhile, most electric vehicles there are cheaper than their gasoline equivalents, according to the International Energy Agency. Though some regions like India and Africa may continue to see rising oil demand, the IEA says global oil demand will likely peak around 2030 before gradually declining.
