Pacific Link pipeline deemed in national interest, could spur oilsands growth

FORT MCMURRAY — Prime Minister Mark Carney has designated the proposed Pacific Link pipeline as being in the national interest, a key step for the project to move Alberta crude to Asian markets.

The announcement, made in Fort McMurray, Alta., this week, means the million-barrel-per-day pipeline proposal to a tanker terminal in southern B.C. will be subject to a streamlined review process shepherded by a Calgary-based major projects office.

Its economic fate hinges on oilsands companies being willing to spend on expanding their output.

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At a news conference, Carney was asked whether he expected a return to boom times in the northeastern Alberta oilsands hub city.

"I wouldn't use the term 'boom,'" he replied. "I would use 'sustained growth.'"

The last boom from the mid-2000s to mid-2010s came with side-effects like cost inflation, labour scarcity and housing shortages.

Carney and Alberta Premier Danielle Smith say that if oilsands companies start building again, it will be different this time.

"We learned lessons from the past in building infrastructure," Carney told reporters on Thursday.

He said local mayors are thinking ahead for what their communities need and early participation from First Nations leaders means "a much broader spread of the economic benefits."

He also cited "another phase of technical innovation" in the industry.

At the news conference, Smith noted the autonomous oilsands haul trucks in the backdrop.

Previously, human drivers for those vehicles would have received six-figure salaries and might have been flown in and out of the site from elsewhere in Canada.

"(Companies) have managed to find a way to increase production without having the kind of dramatic pressure that we saw in the past of a large number of people moving here, not able to find homes," Smith said.

The premier said she has also talked to local municipal leaders about the bridge and road infrastructure that might be needed if production ramps up.

Oilsands companies have for years shied away from the multibillion-dollar megaprojects of more than a decade ago.

The last mine to be built from scratch was Fort Hills, operated by Suncor Energy Inc.

From when it got the final go-ahead decision in 2013 to its startup in 2018, its cost ballooned to more than $17 billion from $13.5 billion.

Lately, companies have opted to tweak existing operations to squeeze out more bitumen instead of starting new projects.

Executives have cited a lack of pipeline capacity, a convoluted regulatory regime and onerous environmental regulations for the chill on large-scale growth.

But also around the time investment fell off a decade ago, global crude prices cratered amid a supply glut.

Fast forward to 2026, and the Mideast war has laid bare the vulnerability of global energy supply chains and left countries clamouring for stable providers.

A host of Trudeau-era energy policies loathed by oilpatch players have been undone and Pacific Link has taken a big step forward.

Andrew Botterill, who leads Deloitte Canada's oil, gas and chemicals practice, said the Alberta oilpatch has matured since the last boom.

"What we have is a more efficient, far more aligned group of producers up there than maybe what it was 10, 15 years ago," he said.

"They've come together as an alliance and really recognize that 'We've got to share labour, we've got to be less competitive, we've got to find ways that we can do things together and not just drive up costs.'"

Oilsands properties are concentrated in fewer hands than a decade or more ago, with several international players having exited or reduced holdings.

Lance Mortlock, managing partner at EY Canada, flagged a bigger-picture concern over the availability of workers with multiple major projects in the works.

"We're going to need tens of thousands of workers across the country to build this stuff: engineers, professionals, welders, pipe fitters," Mortlock said.

"I'm not sure where all these people are going to come from if we do half the projects that we have the desire to construct."

With files from The Canadian Press, Global News and BNN Bloomberg