Pacific Link pipeline designated national interest project, aiming for sustained oilsands growth

FORT MCMURRAY · Prime Minister Mark Carney announced the Pacific Link pipeline proposal has been designated a project of national interest. The million-barrel-per-day pipeline would run from Alberta to a tanker terminal in southern British Columbia. The designation, made under legislation passed last year, means the review process will be streamlined by the Calgary-based major projects office. Carney and Alberta Premier Danielle Smith made the announcement in Fort McMurray this week, framing it as a step toward renewed but measured growth in the oilsands.

Asked if the move would trigger another boom in the region, Carney offered a different term. "I wouldn't use the term 'boom,'" he replied. "I would use 'sustained growth.'" He and Smith said the rapid expansion seen from the mid-2000s to mid-2010s brought problems like soaring costs, labour shortages and housing crises. They argued that any new wave of development would be managed differently to avoid those side-effects.

Carney said the approach incorporates lessons from past infrastructure builds. He pointed to forward planning by local mayors and engagement with Indigenous communities. "Early participation from First Nations leaders means 'a much broader spread of the economic benefits,'" Carney said. He also cited recent technical innovations within the industry as a factor enabling more efficient growth.

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For years, oilsands companies have avoided the massive greenfield projects that characterized the previous era. The last new mine, Suncor's Fort Hills, saw its cost soar from an estimated $13.5 billion to over $17 billion between its approval in 2013 and startup in 2018. Since then, producers have focused on incremental expansions of existing operations. Industry executives have long blamed a lack of pipeline space, complex regulations and environmental rules for stifling major new investment.

Global market conditions have also shifted. A decade ago, a supply glut caused oil prices to crash, chilling investment before the pandemic further reduced demand. The current geopolitical landscape, highlighted by conflict in the Middle East, has increased demand for stable energy suppliers. Smith highlighted how operational changes, like using autonomous haul trucks, are altering the workforce dynamic. "(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," she said. The premier said she is discussing necessary supporting infrastructure with municipal leaders, such as upgrades to Highway 881 south of Fort McMurray. "There's lots of ways that we can partner with the federal government to make sure those key infrastructure projects get built, so we build on a pace that allows us to keep up," Smith said. Industry observers note the oilsands sector is now more consolidated and collaborative than during the last boom.

Andrew Botterill of Deloitte Canada said producers have formed alliances to share labour and control costs. Lance Mortlock of EY Canada raised a broader concern about the national demand for skilled workers, with several major energy and infrastructure projects potentially moving forward. "We're going to need tens of thousands of workers across the country to build this stuff: engineers, professionals, welders, pipe fitters," Mortlock said. He questioned where these people would come from and called for better sequencing of projects to optimize labour supply.

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