(Photo by Jason Woodhead via Flickr/CC BY 2.0 DEED)
A recent memorandum of understanding between the Government of Alberta and the federal government to facilitate a new oil pipeline from Alberta to the Pacific Coast of Canada has sparked political uproar in Western Canada. Alberta is a major oil-exporting province, and its conservative premier, Danielle Smith, wants to increase international oil export capacity. Supporters say the memorandum is consistent with existing federal policy and would expand market access. Yet, critics argue it risks undermining climate legislation intended to limit Canada’s CO2 emissions.
While there is still considerable resistance to the plan from coastal First Nations and the B.C. government, it is also a weak deal for many Albertans. This plan is problematic due to the costs associated with fossil fuels and the infrastructure required to produce them, especially given international instability in the energy market. This proposal for a new pipeline from Alberta to British Columbia for international export would be a significant step backwards in the fight against climate change by enabling higher production and emissions.
Economic Headwinds for Oil
Economically, new pipeline projects are a bad investment for the province because by the time Canada completes a new pipeline, many countries that would purchase oil may have cheaper alternatives. With examples like China and Pakistan building massive new solar infrastructure, demand for oil from distant countries like Canada may slow or become uncompetitive with closer suppliers. In addition, U.S. foreign policy and global geopolitics can drive volatility in the oil market. More supply can push prices down for exporters like Canada, while instability can make buyers more cautious about relying on global producers.
Canada exports much of its crude and imports refined oil products, which complicates claims that more export capacity improves affordability at home. Given that oil sands are a higher-carbon-emitting fossil fuel, it may be an environmentally risky and cost-inefficient plan, especially in markets where carbon-related costs affect pricing.
All this to say, as global energy markets shift, a plan to increase capacity to export oil is a risky economic decision by Alberta. As reported, taxpayers would pay for the installation of the necessary pipes through subsidies, with full private financing for the plan unavailable at the time of its announcement. This lack of private investment means the provincial government would take a major gamble with public funds, assuming that the pipeline will deliver economic benefits within a short timeframe. This plan would put Albertans in a precarious position, leaving the province exposed if revenues fall short of the public costs, including long-term infrastructure and environmental liabilities.
Industry-wide Inequality
The Alberta oil industry’s economic benefits to corporations often outweigh those to its workers and communities. The industry cut 10,000 jobs in 2025 even as it produced more oil than ever. Profits from Canadian oil sales are also not evenly distributed, with the Alberta Federation of Labour reporting that workers’ share of the value created fell from 52% (2011-2014) to 24% (2021-2023), even as the profits rose. With that in mind, the possibility of more oil being produced while fewer people are employed suggests the financial gains flow more to companies than to the people and communities that produce it.
Paying for pipeline subsidies means using public money to support private profit, with limited direct benefit to communities where the oil industry operates. Albertans are already paying for abandoned oil wells that require oversight and costly maintenance to prevent leaks, so that long-term liabilities can fall on the public even as employment declines. A new pipeline means continuing to build infrastructure that will only cost future generations more, especially as climate impacts increase public costs over time.
Environmental Impact in Alberta
The oil industry in Canada is also a contributor to climate change, as oil is a major CO2 emitter across various industries. Much of what affects Albertans is the level of atmospheric CO2, its warming effect, and its impact on Alberta’s forests and the province’s overall environment. With less water and hotter summers, wildfires are more severe and more expensive to fight, and recovery costs can be high. In addition, the environment becomes less stable as flooding becomes more dangerous, especially when vegetation loss reduces the soil’s ability to absorb and hold water.
With polling from the University of Calgary showing that a majority of Albertans are concerned about climate change and extreme weather, a new oil pipeline would mean continuing to invest in energy production that causes climate change. With housing costs already high in Canada, increased demand for flood protection and fire insurance could drive up prices in Alberta.
Pipelines, while the most efficient way to transport oil, also have significant environmental impacts during construction and pose risks of major pollution. Leaks from oil infrastructure can have a serious impact on local water resources and cause major health problems. Trevor Mercredi, grand chief of First Nations Treaty 8 of Alberta, expressed concern about the push for a new pipeline, the associated environmental damage from tailings ponds, and the lack of critical oversight in the new memorandum.
Leaders and community members from Athabasca Chipewyan First Nation have raised concerns about tailings leaks, water contamination, and potential downstream health impacts. Spills associated with oil industry activity and climate change, which include increasing fires and floods, can impose costs across Alberta.
Poor Plans for the future in Alberta
Alberta’s plan to increase investment in oil exports through a new pipeline would be a high-risk decision that would harm the province’s future, residents, and natural environment. Given the expectation that peak oil consumption will occur in the near future, the pipeline plans are a step backwards, as international demand for fossil fuels is soon to peak, and demand for non-fossil fuel-based energy will be essential to improving the quality of life in Alberta and around the world.
Political support for a new pipeline exists, but the costs of building and maintaining a route to B.C.’s coast may not match the benefits most residents would see. Given the many possible shifts in the oil market, the rationale for oil taxes benefiting the province and country also implies that when oil prices are low, there is a shortfall in government spending on public services, including environmental damage mitigation Mitigation and cleanup costs can remain long after wells stop generating profits.
Edited by Atena Abbaspourbenis
