We need clean, renewable energy to tackle climate change, strengthen energy security, and provide power for a resilient Canadian economy. Building pipelines and relying on the fossil fuel industry is the same path as Donald Trump’s America, and would take us in the wrong direction.
Since returning to the U.S. presidency, Trump has proclaimed that fossil fuel companies should ‘drill, baby, drill!’ and unleashed a tsunami of cuts and rollbacks to environmental protections and climate policy. This, alongside his tariffs and talk of annexing Canada, has changed the game when it comes to energy in North America.
Now more than ever, Canada must reassess its once-cozy economic ties with its southern neighbour and take decisive steps to strengthen its economic security. In light of this shifting political landscape, Big Oil’s most adamant supporters have dusted off their tired proposal that more pipelines and fossil fuels are a magic salve for all our woes. But here in reality, new pipelines are a really, really bad idea.
Here are seven reasons why:
1. Pipelines can’t be forced through without community consent
A new east-west pipeline would have to cross thousands of kilometres – about 4,600 km if one were to follow the proposed route of the failed Energy East pipeline. That’s a lot of nature, communities, and a lot of backyards! To get it done without delays would require approval from communities along the route, and informed consent from Indigenous Nations whose territory it would cross. We should be well past the era of pushing pipelines through without consent, and there would likely be major resistance to this pipeline at many junctures along the route. Quebecers rejected the Energy East when it was proposed, and would likely reject any pipeline that bring high risks to important waterways. We need to build projects that help unify us, but projects like Energy East risk sowing major division.
2. Pipelines are VERY expensive
Let history be our guide. The Trans Mountain Expansion (TMX) pipeline project was initially estimated to cost $7.4 billion, but by the time it was actually finished, it costed nearly 5 times that amount: $34.2 billion. The initial cost for the controversial Coastal Gas Link pipeline was $6.6 billion, but increased to $11.2 billion by the end of the project. The estimated cost for Energy East was about $15.7 billion nearly a decade ago. What’s the realistic price tag be today, or by the time it was completed?
We do need major investments in energy infrastructure, but it’s critical we prioritize investing federal money in cost-effective renewable energy projects and critical grid infrastructure. Unlike pipelines and fossil fuels, renewable energy is the cheapest source of energy in history. We can enable affordable, reliable, renewable energy across Canada by improving our east-west electricity grids, connecting provinces through transmission corridors, and investing in energy storage. This option will keep electricity affordable for everyone and protect our own energy security.
3. Pipelines are slow to build
Pipelines usually take over a decade to build, by which time we wont want it. Let’s look at the most recent pipeline projects in Canada. It took 13 years for the TMX project to be completed after it was initially announced by the original proponent Kinder Morgan. The Coastal Gas Link pipeline had a similar timeline, initially announced in 2012 and completed in 2023. These examples are both pipelines that move fossil fuels west from Alberta, a considerably shorter route and undertaking than an easterly pipeline. These timelines don’t map onto Trump’s tenure as U.S. President, and are not a logical response to his tariffs – a point recently raised by Minister of Natural Resources, Jonathan Wilkinson. This timeline is also incompatible with projections for future oil demand, not to mention the urgency with which we must reduce fossil fuels to prevent further global warming.
Yes, the federal government is committing to expedite project reviews, but this comes with major risks. If the government doesn’t follow its own laws there will be challenges. And the government has to fulfill its duty to consult First Nations, and ensure they give their free, prior, and informed consent on any project that crosses their territory. This is not a process that can be rushed.
4. There are no buyers
Canada sells 97% of its export oil to the US. The rationale for new pipelines used by pro-oil advocates is that Canada can export oil and gas to other countries if it can reach the coasts. But there are some key flaws with this logic, primarily that there’s no major market for Canada’s dirty, expensive oil.
US President Trump has stated that he wants the United States to be energy independent and that his country no longer needs Canadian oil. While that’s not true today, it should be a clear signal to Alberta that this market is diminishing. Canada’s second-largest market for exported crude oil is China (it’s a small fraction of our exports), but that country has plateaued in its oil consumption, and most of its future energy demand will be met by renewable energy.
The notion that Canada should find other buyers for our oil was used to help justify the TMX pipeline. But even now that the TMX pipeline is operational, it’s not running at full capacity. Oil companies don’t want to pay the cost of the shipping tolls, which are set to recoup some of the building and operating costs.
The oil from the Canadian tar sands is heavy crude, which requires specialized refineries. Refineries in the U.S. are set up to handle tar sands oil, but refineries in other countries, by and large, are not. It would take time and considerable amounts of money to retool refineries and actually create more international markets for Canadian oil. But why would a refiner do that when there’s a glut of oil available because OPEC, Organization of the Petroleum Exporting Countries led by Saudi Arabia, is also ramping up production?
There’s a false-narrative being pushed by pro-oil advocates that if we build pipelines to the east, we can use Canadian oil for domestic purposes instead of exports. Canada produces a lot of oil—much more than people in Canada actually use. In fact, over 80% of the oil Canada produces is exported, which amounts to more than 4 million barrels every day.
At the same time, Canadians consume about 2.4 million barrels of oil each day. To help meet that demand, Canada also brings in a smaller amount of oil from other countries—around 490 thousand barrels daily. Substituting our imports with domestic oil could not sob up excess Canadian production.
So, even though Canada produces a huge amount of oil, most of it is exported, not used at home.
Similar to the lack of other international buyers for Canadian oil, refineries in Quebec and the atlantic region are also not set up to process the vast quantities of tar sands heavy crude that a pipeline would deliver. They have access to lighter crude that gives better returns and can be imported more flexibly to meet demand and refining capacity. Retooling existing facilities or building new refining capacity is another massive expense, and heavy crude refining has higher operating costs. It’s not a good deal for companies that own eastern refineries. When Energy East was being considered, Irving Oil’s president confirmed that their New Brunswick refinery would continue to import foreign oil even if the pipeline went ahead. Plus, refining heavy oil is more polluting and has higher water usage. Communities in eastern Canada would need to evaluate the impact of increased local pollution that accompanies processing heavy crude at refineries in Quebec or New Brunswick. In this context, the argument that an east-west pipeline would increase domestic energy security is a red herring.
5. There’s no project proponent
Companies care most about their profits.That’s why no company has expressed an interest in reviving Energy East. And Enbridge has said they have no interest in revisiting Northern Gateway. Despite a flurry of support from pro-oil advocates, think tanks, and talking heads, no private company or investors have come forward offering to put money on the line.
A pipeline must be viable for decades to make money for owners and investors, and they see the writing on the wall. Building pipelines is a controversial and costly endeavour, which makes them high-risk for investors. The oil market is volatile. And fossil fuel demand is projected to peak by 2030 and then eventually decline. Pipeline boosters are no doubt hoping that the government will step in. But we can’t afford another costly boondoggle like TMX. And Canadians aren’t interested in further subsidizing the oil industry.
6. Pipelines won’t protect the Canadian economy.
More than 70 per cent of oil sands production in Canada is owned by foreign – mostly American – shareholders. When Canada doubles down on oil, much of the wealth created leaves Canada.
While some regions are reliant on royalties from fossil fuel production, diversifying the economic backbone of those regions is the best way to make them more resilient and help them thrive into the future. Across Canada, only 18 communities are even somewhat dependent on fossil fuel jobs (more than 5% of employment). And just two communities depend on fossil fuels for over 20% of their jobs. We can help these communities by creating tailored programs to support new kinds of jobs and businesses.
Overall, Canadian energy and economic security can be strengthened by being less reliant on exports to the volatile international oil market. Investment in electricity infrastructure and renewable energy not only makes energy more affordable for people in Canada (which new pipelines do not) but also support the growth of other industries by providing reliable and affordable power.
7. Pipelines Enable More Fossil Fuel Use. We Need Less.
Finally, the foundational reason why new pipelines are a bad idea is that fossil fuels cause climate change. Climate scientists have been clear that to stop the climate crisis from escalating, we need to drastically reduce greenhouse gas emissions, the majority of which are from fossil fuels. The International Energy Agency’s report on what’s required to meet our climate change targets makes clear that no new oil and gas fields or coal mines should be approved anywhere in the world after 2021. Instead, we need to rapidly roll out tried and true renewable and energy storage technologies, and shift from fossil fuels to clean electricity to power the economy.
Pipelines only make financial sense if they stay full and active for decades. But building new ones now would lock us into more fossil fuel production and exports at a time when global demand for oil and gas is expected to peak within the next five years. But that’s exactly why pro-oil advocates are pushing for new pipelines: to keep us hooked on fossil fuels so they can keep profiting.
Let’s not allow Canada to get suckered into building new pipelines. If Prime Minister Carney’s government wants to build national projects that will strengthen Canada, it must instead look to building electricity infrastructure and renewable energy projects that benefit communities, rather than lining the pockets of fossil fuel CEOs.
