Pancakes, Politics, and Pipelines: The Political Winds Supporting the Development of Canadian Crude Oil Pipelines

The Calgary Stampede is an opportunity for folks to let their hair down and become a cowboy or cowgirl for ten days every July. Billed as “The Greatest Outdoor Show on Earth,” the Stampede attracts tourists from around the world and politicians from around Canada. Local and visiting politicians take in the fun that is the Stampede but are often called upon to flip flapjacks at one of many pancake breakfasts held across the city. Not only did they flip flapjacks during the 2026 Stampede, but a few of them also announced pipeline projects.

The first announcement came on July 2, the day before the official start of the 2026 Stampede, when Canadian Prime Minister Mark Carney and Alberta Premier Danielle Smith jointly announced that a West Coast oil pipeline from Bruderheim, Alberta (northeast of Edmonton) to a marine terminal in Delta, BC (near Vancouver) would be submitted to Canada’s Major Projects Office for evaluation. The next announcement came on July 6 when Premier Smith and Ontario Premier Doug Ford announced the Northern Shield Energy Corridor, a pipeline between Hardisty, Alberta and Sarnia, Ontario, following an all-Canadian route.

These two announcements of all-Canada pipelines came on the heels of two cross-border pipeline projects that would increase pipeline capacity into the U.S. The first, proposed by Bridger Pipeline, would run between the Canada-Montana border and Guernsey, Wyoming. This proposed Bridger Pipeline received a presidential permit from U.S. President Donald Trump on April 30, 2026. In May, South Bow announced that it had received 20-year throughput commitments for their proposed Prairie Connector, a partial revival of Keystone XL that would connect Alberta and Wyoming and would decide on progressing the project in 2027.

This article analyzing proposed pipelines is a continuation of a series of articles in which Stillwater has discussed challenges facing Canadian heavy crude oil production. Earlier articles in this series include:

• Trans Mountain Pipeline: Déjà Vu all Over Again?
• TMX at One Year: Why the West Coast Is Not the End of the Line
• Why Does Canada Import So Much Crude Oil?
• Beyond Borders: The Critical Connection Between Canadian Crude and U.S. Refineries

 Bridger and South Bow

Receiving a presidential permit is a critical first step to the success of the proposed Bridger pipeline. Completing construction before President Trump leaves office on January 20, 2029, could also be critical to avoid the fate of Keystone XL, whose presidential permit was canceled by President Joe Biden on his first day in office.

The politics currently favor the Bridger Pipeline, especially if the pipeline can be completed by 2028; it also appears that the pipeline has gained commercial favor as well. Reuters reports that Bridger and South Bow have teamed up to jointly develop their projects to create a new pipeline between Wyoming and Oklahoma. This joint Bridger–South Bow pipeline would provide access to the U.S. Gulf Coast, enhancing the connection between the world’s largest heavy oil reserves and the world’s largest heavy oil refining center. Reuters also reported that shippers had committed to move at least 400 thousand barrels per day, and South Bow has since disclosed 20-year commitments from nine shippers totaling 465 thousand barrels per day – about 85% of the pipeline’s initial capacity and surpassing the 450 thousand barrels per day that the companies had targeted to progress with construction.

The combined Bridger and South Bow pipeline option is industry-led and appears to be supported by potential shippers. The West Coast Pipeline and Northern Shield Energy Corridor projects differ, however, because they are led by governments rather than industry, and industry support has primarily come in the form of words rather than commitments. Will the political inertia behind these pipelines be sufficient for them to be successfully constructed?

Political support has become one of the most critical success factors for Canadian export pipelines. This need for political support is evidenced by the unsuccessful conclusion to the Northern Gateway, Energy East, and Keystone XL pipeline projects and the successful conclusion to the Trans Mountain expansion. The political winds have shifted in favor of crude oil pipelines, but will that political support lead to completed pipeline construction?

The West Coast Pipeline

The West Coast Pipeline is supported by the Alberta and federal leaders. The pipeline would be indirectly owned equally by the Alberta and Canadian governments, with Pembina Pipeline taking a 10% stake. Canada’s Major Projects Office, which has been charged with evaluating the project from a federal perspective, will “engage with the Government of British Columbia, and all decisions will be informed by meaningful consultations with indigenous communities.” While engagement and consultation do not appear to grant a veto, history suggests that securing support from British Columbia and the First Nations will be critical for the success of the West Coast Pipeline.

Significant steps towards achieving support from the British Columbia government have been made. On July 2, the Canadian and British Columbia governments also reached an agreement that supports the building of the West Coast Pipeline. This agreement requires Canada to engage meaningfully with First Nations and to allow BC to share “meaningfully in the economic upside of the project,” including an annual royalty payment to BC and the creation of an environmental and emergency response trust fund.

Assuming that the royalty requirement is reasonable, the support of British Columbia appears to be in place. However, First Nations support is less certain. The multiple parties involved with dramatically different interests and agendas create significant challenges. Whether or not a reasonable accommodation can be made to secure First Nations support remains to be seen.

Commercial support is uncertain. The governments of Canada and Alberta have reached an agreement with the Oil Sands Alliance regarding the Pathways Project, a carbon capture and storage project in Alberta, to offset the carbon intensity of Canadian heavy oil. The agreement with the Oil Sands Alliance, which consists of CNRL, Cenovus, ConocoPhillips, Imperial, and Suncor, signals support of the West Coast Pipeline but does not encompass the volume commitments on the West Coast Pipeline that will be necessary for it to proceed. Securing sufficient shipper commitments will be key to the success of the West Coast Pipeline, and so far these commitments have not been forthcoming.

Northern Shield Energy Corridor

The Northern Shield Energy Corridor appears to be even less grounded in commercial realities. This pipeline mimics part of the unsuccessful Energy East Pipeline but only promises an uncertain option to connect to a marine port in Churchill, Manitoba. The port is currently operational for four months each year with the last ship departing by the end of October, but studies have assessed a potential expansion of its operating window to the full year. Those studies, released earlier this month, concluded that year-round shipping on Hudson Bay could be feasible with ice-hardened vessels, but also found low market potential for shipping crude oil through the bay. Whether that port could serve as a viable crude oil export facility remains very much in doubt.

The pipeline appears to be driven by the “Elbows Up” movement.^[1] It would connect Hardisty, Alberta, to the Sarnia refining center in Ontario, duplicating services already provided by the Enbridge Mainline system. The project is touted by the Government of Ontario as providing more capacity, redundancy to existing pipelines, strengthening national security, and creating new job opportunities.

But the Sarnia market is already adequately supplied by the Enbridge system. As Stillwater has previously noted, the Sarnia refineries are not set up to process the Canadian crude oil that would likely flow on that pipeline, and expanding their capability to do so does not appear to be high on the list of refinery projects the owners are even considering. In its defense, the pipeline would mitigate the risk that the Michigan government could stop crude oil from flowing through Enbridge’s Line 5 as Governor Whitmer has threatened due to what she sees as an unacceptable spill risk where Line 5 crosses the Straits of Mackinac. It appears to be very expensive insurance, and the jury is out as to whether the Ontario refiners will be willing to pay that price.

Outside of the escalating trade war between the U.S. and Canada, the all-in Canada route makes little sense, and this option would struggle to secure commitments. Barring a credible export option, even with the recent escalation, the commercial success of the Northern Shield Energy Corridor is highly uncertain. Interest from prospective shippers and shipper commitments will be necessary for this pipeline to make economic sense.

Bringing it all together

The market solution to increasing pipeline capacity out of Alberta appears to be the Bridger and South Bow project. This pipeline would provide increased access to the optimal crude for the world’s largest heavy oil refining center while securing access to the largest heavy oil refining center for the world’s largest heavy oil reserves. It seems like a win-win proposition and would be the obvious solution were it not for the actions of a U.S. President that Canadians widely interpret as anti-Canadian.

Of the other options under consideration, the West Coast Pipeline may be premature considering that the existing Trans Mountain Pipeline can be expanded by 300 thousand barrels per day through the addition of a drag-reducing agent combined with facility enhancements. Trans Mountain states that its recent open season for firm service on existing capacity “demonstrated strong demand” while stating that an open season for the expanded capacity ran from July 13 to August 10, 2026.

The federal government has advanced the process to designate the West Coast Pipeline as a “project of national interest.” If the process results in a “project of national interest” designation, the approval process, including environmental assessments, would be fast-tracked. Rumors suggest that the Alberta government will use its royalty system to “encourage” commitments, but it remains to be seen if shipper support can be mobilized on a timely basis. Securing such commercial support could be challenging if shippers are serious about their commitments to the Bridger–South Bow pipeline.

Bottom Line: Like the Stampede itself, this year’s flurry of pipeline announcements delivered plenty of showmanship, but when the dust settles and the midway lights come down, only the projects with genuine commercial support will still be standing.

Stillwater Associates can help you sort through these issues. While we are based in California, our team includes associates who reside in Canada and are deeply familiar with Canadian crude oil markets, pipelines, and policy. Contact us to discuss how these developments may affect your business.