A new oil sands pipeline to the northern coast of British Columbia is a non-starter as long as oil tankers are forbidden there, but experts say the extraordinary step of removing the federal ban would only lift one of many obstacles deterring private sector investment in such a project.
Media reports say the federal and Alberta governments are poised to announce a memorandum of understanding Thursday, affirming support for a pipeline alongside emissions-reducing measures, The Canadian Press writes. The agreement reportedly includes exemptions to the tanker ban, which has been law since 2019.
Warren Mabee, director of the Queen’s University Institute for Energy and Environmental Policy, said the possible MOU would be a “policy document” of sorts that’s subject to change and non-binding, but nonetheless significant.
“The fact that… the prime minister is throwing his weight behind it and the premier is throwing her weight behind it tells us that this is a pretty serious agreement,” he said.
“It doesn’t necessarily mean that something will be built right away or that everybody will get everything they want, but it’s certainly a step toward more infrastructure development.”
The Alberta government has announced plans to spearhead a proposal for an Alberta-to-B.C. pipeline that could carry up to a million barrels of oil sands crude per day for export to Asian markets. It has committed $14 million to fund early work on an application to Ottawa’s new Major Projects Office in the spring for a speedy review, with the goal of derisking it enough to hand it off to the private sector.
It’s been described as Northern Gateway 2.0, referring to an Enbridge Inc. project to Kitimat, B.C., that was nixed by the federal government a decade ago after protracted legal battles and intense environmental and First Nations opposition.
Premier Danielle Smith has said the province is stepping in because no private sector player is willing to invest in a project as long as the tanker ban and several federal environmental policies remain in play.
Richard Masson, executive fellow at the University of Calgary’s School of Public Policy and former head of the Alberta Petroleum Marketing Corporation, said any new project would have to compete with alternatives. [There was no indication that Masson’s list included renewable energy, battery storage, or energy efficiency options that are already more affordable for most purposes than new fossil fuel infrastructure.]
Enbridge and Trans Mountain Corp. each have plans to expand existing networks to the U.S. and Vancouver area, respectively. Together, those could add 650,000 barrels per day of new export capacity by 2030.
Northern Gateway would have had two parallel pipelines—one bringing diluted oil sands bitumen west, and another bringing ultralight oil from the coast eastward to thin out the bitumen enough to flow.
It’s unclear whether a new plan would be the same.
“When you start to look at that you say, ‘Holy smoke. Can we build something like that with a toll that would be competitive to the alternatives?'” said Masson.
While lifting the tanker ban would be a “helpful symbolic gesture,” added Zach Parston, national infrastructure leader at KPMG in Canada, “there are projects and then there are pipeline projects.”
Getting new pipelines built has been notoriously difficult in Canada in recent years. They’re capital-intensive undertakings that take a long time to build and need to be backed by commitments from producers to actually fill them up. For years, analysis by the International Energy Agency and others has projected that demand for that oil won’t likely materialize through the 2030s or beyond.
Indigenous and environmental opposition to some projects has been fierce, and one environmental campaigner has said opposition to a new West Coast pipeline would make Northern Gateway look like a “kids’ birthday party.”
Lifting the tanker ban likely “isn’t sufficient on its own to change investment calculus,” Parston told CP.
“Ultimately, these projects need to continue to be derisked. Things like corridor certainty, predictable permitting, support from local communities and Indigenous Nations, and competitive investment climate are going to be critical to that decision to invest in pipelines in Canada.”
The main body of this report was first published by The Canadian Press on Nov. 26, 2025.
