Canada wants new pipelines to avoid tariffs; nobody wants to build them

Sub :IR

Sec : Places in news

Context:

With U.S. President Donald Trump threatening tariffs on Canadian oil exports, several Canadian politicians have advocated for new pipelines to coastal export terminals to reduce dependency on the U.S. market.
Oil is Canada’s most valuable export, with the country being the fourth-largest oil exporter in the world, sending around 4 million barrels per day to U.S. refineries, making up 90% of Canada’s oil exports.

Private Sector Reluctance and Past Failures:

Despite the calls for new pipelines, no private company has shown recent interest in taking on such a costly, multi-billion-dollar project. Experts believe it could take up to a decade to complete.
The last decade saw the cancellation of two major east-west pipeline projects, and a Canadian company faced significant financial losses when former U.S. President Joe Biden revoked the Keystone XL pipeline permits in 2021.
Trump expressed support for Keystone XL and pledged easier regulatory approvals but also indicated that tariffs on U.S. imports from Canada would go into effect in March, which would hurt Canadian oil demand.
Regulatory uncertainty, lengthy permitting processes, and environmental opposition also complicate pipeline construction.

To move forward, experts suggest that the Canadian government must amend the Impact Assessment Act, collaborate with provinces, and make policy changes to support energy infrastructure.
Moreover, companies need confidence in the oil sands industry’s ability to increase output, although Canada has committed to net-zero emissions by 2050, which conflicts with increased oil production.

Existing Pipeline: Trans Mountain System

Canada’s current option to bypass the U.S. is the Trans Mountain pipeline system, running from the oil-producing province of Alberta to the British Columbia west coast, allowing crude exports to overseas markets.