Ottawa's West Coast Pipeline Decision Sparks Divided Opinions on Viability

The fate of a proposed pipeline from Alberta to the West Coast is being decided by Ottawa next week, amid concerns about oil producers' appetite to fill the line and whether long-term demand justifies the expenditure.

The pipeline would cost between $35 billion and $43 billion, with 90% owned by federally owned Trans Mountain Corp. and the Alberta Petroleum Marketing Commission. The remaining 10% interest would be held by Pembina Corp., which would also contribute to the design.

Ian Sanderson, a senior analyst with the Pembina Institute, said the main challenge facing Alberta producers is not a lack of export capacity but uncertainty around future demand, prices, and the economics of long-term oil infrastructure. With the private sector largely unwilling to participate in the project, Mr. Sanderson said public dollars should go to other sectors to diversify the economy.

Randy Ollenberger, an oil and gas analyst with Bank of Montreal, disagreed, saying a new pipeline is crucial for accessing growing markets in Asia and reducing Canada's exposure to rising Venezuelan production.