Canada fast-tracks Pacific oil pipeline to reduce US dependence as Alberta separation vote nears

TORONTO (AP) — Canadian Prime Minister Mark Carney on Thursday fast-tracked a proposed million-barrel-a-day oil pipeline to the Pacific Coast, a bid to reduce the country’s dependence on the United States and mend relations with oil-rich Alberta as separatists push for a referendum on leaving Canada.

Carney, appearing with Alberta Premier Danielle Smith in Fort McMurray in the heart of Canada’s oil sands, designated the pipeline, now called Pacific Link , a project of national interest under legislation his government enacted to accelerate major infrastructure projects.

Alberta is holding a public vote on Oct. 19 on whether to hold a referendum on leaving Canada. Smith has long complained that Carney’s predecessor, Justin Trudeau, hindered Alberta’s energy industry and fueled separatist sentiment.

“For too long, we’ve watched projects with enormous transformative potential get mired down in uncertainty and delay, and today we’re turning the page,” Smith said.

Carney did not directly mention the separatist movement but repeatedly stressed national unity, saying Canada is “bigger, stronger and more prosperous when we are united" and that “Canada is working.”

“Today, 90% of Alberta’s oil goes to the United States,” Carney said. “Pacific Link will materially reduce that dependence by allowing Canada to export an additional 1 million barrels a day to growing markets in Asia.”

Carney said Pacific Link was part of a broader effort to make Canada less dependent on the United States and achieve “greater strategic autonomy, so we can continue to live our lives as we choose.”

The government said 90.1% of Canadian crude exports went to the U.S. last year, calling the country’s reliance on U.S.-bound infrastructure a “structural vulnerability.”

It said Pacific Link, combined with optimization of the Trans Mountain system, could reduce Canada’s fixed pipeline dependence on the U.S. from about 82%-83% of capacity to 65%-70%.

The push comes as U.S. President Donald Trump’s trade war and threats against Canadian sovereignty have prompted Carney to reduce Canada’s long-standing economic dependence on its southern neighbor.

The proposed 1,250-kilometer (775-mile) pipeline would run from Bruderheim, northeast of Edmonton, Alberta, to a deepwater port near Delta, British Columbia. It would largely follow the existing Trans Mountain corridor and load crude onto tankers bound for global markets.

The project is expected to cost $25 billion to $31 billion and still faces major questions about financing and whether producers will commit to using it.

Ottawa and Alberta are expected to fund the initial billions of dollars in engineering, regulatory and other development work over the next year.

Calgary-based Pembina Pipeline Corp. has a 10% economic interest in the project but has not yet put up its share of construction costs. A federal official said Pembina would decide whether to make that investment at or before a final investment decision.

An open season to determine how much pipeline capacity oil producers are willing to contract is expected next spring. Officials said there is significant interest but acknowledged that fast-tracking the project does not guarantee it will ultimately secure enough shippers or financing to proceed.

A senior government official said proving Canada can approve the project more quickly could draw additional private investment, while greater access to Asia would give Canadian oil producers more leverage by reducing their dependence on the U.S. market.

The official noted that the Trans Mountain expansion took 14 years from the project’s launch in 2010 until first oil flowed in 2024.

The pipeline also faces significant Indigenous and environmental concerns.

The government acknowledged that most Indigenous communities consulted were not prepared to support listing the project based on the information available, citing unanswered questions about routing, engineering and design, environmental effects, marine shipping, spill response and impacts on Aboriginal and treaty rights. Officials said legal challenges are likely.

Canada, Alberta and the project owners have committed to offering Indigenous communities a minimum 10% ownership interest in the pipeline.

Carney said construction of the Pathways carbon-capture project would be a prerequisite for Pacific Link. The government says Pathways and other measures would reduce oil sands emissions by 16 million metric tons annually.

The government acknowledged, however, that the pipeline would lead to increased oil production and additional emissions.

Carney said the government wants final regulatory conditions in place by September 2027, clearing the way for construction. The pipeline is targeted to begin operating around 2032 or 2033.

Carney has set a goal of doubling Canada’s non-U.S. exports over the next decade.