Canada Ties New West Coast Pipeline to Oil Sands Expansion
By Tsvetana Paraskova - Jul 14, 2026, 5:00 PM CDT
Canada advances a new 1 million bpd West Coast oil pipeline, with Ottawa, Alberta, and major oil sands producers agreeing on a framework that ties the project to emissions reductions and expanded exports to Asian markets.
Oil sands producers commit to the Pathways carbon capture project.
The project reflects Canada's push to diversify away from the U.S. market.
Canada’s biggest oil sands producers, the Alberta provincial government, and the federal government have reached a new milestone in advancing the planned new West Coast pipeline that would move another 1 million barrels per day (bpd) of oil sands output from the top oil province to the British Columbia coast.
The parties on Monday unveiled the backgrounder document of the deal for the new pipeline, West Coast Oil Pipeline (WCOP). In this, “Alberta has agreed to implement financial supports to enable the oil production growth needed to underpin new export capacity, including the pipeline to Asian markets and the Trans Mountain Expansion (TMX) optimization.”
The new pipeline hinges on the five top oil sands producers, Canadian Natural, Cenovus, ConocoPhillips Canada, Imperial Oil, and Suncor, committing to the Pathways carbon capture and storage (CCS) project and to reduce their operational emissions. This was a key demand from Mark Carney’s federal government to agree to the new 1-million-bpd pipeline to expand Alberta’s oil production and Canada’s export base with new customers in Asia.
Committed to Pipeline and Emissions Reductions
In the deal, the federal government touted the emission reduction goals, the creation of jobs, and additional energy sovereignty by attracting buyers of Canada’s oil other than the United States.
The province of Alberta stressed the fact that oil sands producers have been given the green light to double oil production, and that the deal unlocks billions of dollars in investments and production needed for the new West Coast projects.
Environmental campaigners, of course, slammed the backgrounder document released on Monday as “a master class in greenwash.”
The new WCOP will need additional years and a lot of permits, including in B.C., to begin working for the oil sands companies and for Canada’s crude oil exports to Asia. But the recent major milestones, from the official approval early this month to this week’s backgrounder laying down the commitments of the parties, are moving the project closer to reality. Related: Dubai Is Already Planning for the Next Strait of Hormuz Crisis
If it weren’t for the geopolitical upheavals and crises in the past year, the project may have never cleared any hurdles beyond Alberta’s provincial government. But the U.S. trade and tariff policies and threats to Canada’s independence prompted Canadian politicians to work on making energy exports less reliant on the U.S., which imported 90% of all the oil Canada was exporting in the year before U.S. President Donald Trump returned to the White House for his second term in office.
Threatened by tariffs and negative rhetoric from Trump’s White House, Canada chose to become an energy superpower by expanding its crude and LNG exports into Asia, the market that’s always hungry for energy commodities.
Oil Pipeline Milestones
The WCOP is a major move toward bringing increased volumes of Canadian crude to the West Coast for exports to Asia.
The milestones in the project include the commitments the governments and the industry made, which were announced by Canada and Alberta on Monday.
The government of Canada and the five top producers united in the so-called Oil Sands Alliance (OSA), have agreed to establish a regulatory working group to improve the efficiency and effectiveness of federal statutes and regulations governing oil sands development. Canada has also agreed to advance financing to support operating costs for CCS projects, including measures to enhance the durability of the Clean Fuel Regulations (CFR). In addition, the federal government has agreed to review and address technical clarifications and industry concerns related to the CCUS Investment Tax Credit.
The OSA companies have agreed to advance the emissions reduction projects in line with agreed milestones, work with Canada and Alberta to support oil sands production growth associated with the new WCOP, and to prioritize Canadian technologies, suppliers and supply chains, including Canadian steel and aluminum.
Alberta’s commitments feature the implementation of financial supports, yet to be detailed and defined, extension of its Carbon Capture Incentive Program to 2035, and issuance of a Carbon Sequestration Agreement for the Pathways CCS projects and its planned storage complex.
Alberta has also agreed to apply a 120-day approval timeline for qualified projects and establish a bilateral working group with the OSA to address provincial regulatory barriers to oil sands investment and growth.
Commenting on the backgrounder document, Danielle Smith, Premier of Alberta, said,
“The West Coast oil pipeline and Pathways Project are two critical steps towards making Canada an energy superpower and ensuring Alberta remains a destination of choice for investment, innovation and responsible energy development.”
Tim Hodgson, Canada’s Federal Minister of Energy and Natural Resources, noted that “Over the last eight months, we have been steadily delivering on each commitment in the Canada-Alberta MOU, working with Alberta and the energy industry to build major energy infrastructure, reduce emissions, create jobs and prosperity, and secure energy sovereignty.”
Alberta’s minister of Energy and Minerals, Brian Jean, said that “Growing Alberta’s energy production and reducing emissions can go hand in hand.”
But campaigners are having none of this rhetoric.
Keith Stewart, senior energy strategist at Greenpeace Canada, told The Canadian Press, “This is a master class in greenwash, as the pollution reductions committed to in this agreement are only seven per cent of current carbon pollution from the oilsands and would be dwarfed by the additional pollution enabled by a new, taxpayer-financed pipeline.”
By Tsvetana Paraskova for Oilprice.com
