Trans Mountain Pipeline: Déjà Vu all Over Again?

Last April, we published an article on the Trans Mountain Pipeline Expansion (TMX) which was built on the premise that it would provide Canadian producers with access to Asian markets. In that article, we predicted that some of the heavy Canadian crude transported on TMX would be placed in California to supplement the state’s declining production and displace other imports. We now have data to confirm that point of view, but what if there was another pipeline linking Alberta to the U.S. West Coast? Would it be, as Yogi Berra put it, “Déjà vu all over again?”   

Pipeline Politics

Last year’s TMX article looked at the tumultuous history of the project, but its story would be just one chapter in a book on pipeline politics over the past decade; other chapters in the liquid-pipelines saga would be: 

• Keystone XL (KXL) from Alberta to the U.S. Gulf Coast markets 
• Energy East (EE) from Alberta to the Canadian East Coast province of New Brunswick; and  
• Northern Gateway (NGW) from Albera to Kitimat, British Columbia 

These projects were put forward by industry mid-streamers based on market fundamentals, project economics and industry support. They all had substantial pre-final-investment decision activity and, in the case of KXL, proponents had started construction. The projects had stakeholder concerns / related legal challenges but ultimately were cancelled by political action. KXL’s demise was based largely on U.S.-related political actions, but EE and NGW cancellations were Canadian in origin. NGW, for example, was effectively cancelled when the federal government banned oil tanker traffic along the northern BC coast.  

Recently, Canada has transitioned from federal leadership under Prime Minister (PM) Justin Trudeau to PM Mark Carney (both with the Liberal Party of Canada). PM Carney has been viewed as leader in combatting climate change as he was the United Nations Special Envoy on Climate Action and Finance and was behind the UN-backed Net-Zero Banking Alliance. So, despite having a new PM, the politics for Canadian energy projects has not changed… or has it?  

And then there were tariffs

The transition from PM Trudeau to PM Carney is a remarkable political turnaround story as the Liberal Party under PM Trudeau had a 22% approval rating as late as December 2024, but by March 9, 2025, Carney became PM. The reason for this turnaround? Tariffs. Many view the recent Canadian federal election as a referendum to choose the leader best able to negotiate a new economic relationship with the U.S.; this is an important driver for changes in Liberal party policy, particularly around “nation-building projects.” 

Canada, the “Energy Superpower”

The political shift under PM Carny came quickly; notable energy-related items are: 

• Canada’s consumer carbon-tax was abolished April 1, 2025  
• A comprehensive approach to make “Canada the world’s leading energy superpower” was published on April 9, 2025 
• The Trudeau-era’s carbon-emission-cap on the Canadian petroleum industry has so far been retained, but Liberal policy pivoted from targets to accelerating technology solutions (e.g. carbon sequestration) 
• The “One Canadian Economy Act” was enacted on June 20, 2025, to remove interprovincial trade barriers and accelerate approvals for energy and infrastructure projects deemed “in the national interest” (i.e., “nation-building projects”). 

There are two potential nation-building projects of interest that fall under these initiatives. The Pathways Alliance project brings together several major Canadian petroleum producers in a project to gather carbon dioxide (CO2) from major oil sands sites, transport it via a 600-kilometer (km) pipeline network to a sequestration facility. It would capture 4.2 metric tons (MT) of CO2/year by 2030 and 62 MT/year by 2050. 

The second project, which has been put forward by Alberta Premier Danielle Smith, is a one-million-barrel-per-day (bpd) liquids pipeline to tidewater / British Columbia. This proposal is not a revival of the defunct NGW proposal – it would follow a different right-of-way and would reach tidewater at the Port of Prince Rupert (about 110 km further north of NGW’s proposed terminus at Kitimat, BC).  

Linking the projects may seal the deal

There are many challenges that a new West Coast pipeline will need to overcome, but politics has been, and likely will continue to be, a considerable challenge; linking the two projects – the Pathways Alliance project and the BC pipeline – could provide the political cover needed to get both approved. That is, linkage would allow for additional crude production while staying within the oil industry’s carbon-emissions-cap which PM Carney has so far kept. Linkage would also result in a product with lower carbon intensity, which, in the context of the energy transition, helps to secure a longer-term future for the resource. Recently the Canadian public support for pipelines has improved, and connecting these projects could strengthen its social license to operate. In an interview, PM Carney said of the two projects discussed here: “I am confident that my government will do everything we can so that those projects can be built.” 

How would this impact crude markets?

As we discuss more deeply in our companion article, TMX has delivered Canadian heavy crude into California and largely displaced Middle East imports. While California has the refining capacity to take more Canadian heavy crudes, there are barriers to further market penetration. Given that that the terminus of the new proposed pipeline is over 700 km further north of TMX, it is likely that volumes shipped would be wholly destined for Asia, which certainly feels like “Déjà vu all over again.” 

Stillwater can help

If you’re navigating the complexities of North American pipeline politics and crude market dynamics, there’s never been a more critical moment to get it right. The evolving regulatory landscape, shifting public sentiment, and nuanced reality of baseload crude flows mean yesterday’s solutions won’t cut it for tomorrow’s challenges. At Stillwater Associates, we don’t just track the headlines – we dive deep into the structural forces shaping crude supply, demand, and infrastructure decisions on both sides of the border. Contact us to leverage our industry expertise, data-driven insights, and strategic guidance to chart your next steps with confidence.