Alberta Pipeline Plans Raise Questions About Production Capacity

A recent pipeline agreement between Alberta and the federal government is a major step forward for western Canadian petroleum producers, who have long faced transportation challenges. The deal, which will see the development of a new oil line to the Pacific Coast, comes on top of several other proposals from pipeline operators Enbridge, South Bow, and Trans Mountain Corp. to expand their systems by over 1.2 million barrels per day.

However, some experts have questioned whether there will be enough new production to fill these pipelines in the coming years. According to Premier Danielle Smith, Alberta needs to produce more oil to take advantage of the increased transportation capacity. 'We've got to think big, and we've got to be looking at being one of the top three energy producers and exporters in the world,' she said.

The province has submitted a separate plan for a new million-barrel-a-day pipeline from Bruderheim, northeast of Edmonton, to the southern B.C. coast. The West Coast line would be owned and developed by the federal government, Alberta, and Calgary-based Pembina Pipeline. Analyst Kevin Birn notes that existing production will be sufficient to fill the pipeline under moderate global oil price scenarios.

While the country needs more transportation capacity, it's too soon to assume all of these projects will advance. 'Canada needs to prove it can complete these larger projects,' Birn said.