April 2025, Vol. 252, No. 4
Features
Alberta, Ottawa Pin Hopes on U.S. Ties to Revive Pipeline Projects
By Eugene Gerden, International Correspondent
(P&GJ) – Canada plans to continue the development of its pipelines’ network in the next several years, due to maintaining high domestic demand for natural gas and the ever-growing exports.
In fact, the demand for natural gas in Canada has always been strong, while production is high. According to data of the Canada Energy Regulator (CER), a state agency which regulates the energy sector of Canada, currently the country remains the fifth-largest natural gas producer in the world.
In 2023, production was at the level of 17.9 Bcf/d, a 3.6% increase from 17.3 Bcf/d in 2022. In general, the demand for natural gas in Canada has been rising over the past five years, while this year, the growth is generally ongoing.
Most of the natural gas produced in Canada comes from landlocked Alberta, as well as British Columbia. These provinces accounted for 98% of Canada’s total production in 2023. Saskatchewan, Ontario and the Northwest Territories (NWT) account for the rest.
As a rule, the demand for natural gas is highly variable in Canada, which is mainly due to large temperature variations between the summer and winter months. The demand increases by almost six times between the months of August and February in the residential and commercial sectors. The industrial sector, which includes electric generation and oil sands production, remains the major consumer of natural gas in Canada.
According to earlier data from the Canadian Climate Institute, Canada’s leading research agency in the field of climate change, in Canada, 44% of domestic homes and the majority of businesses still rely on gas for heating, which means that the country continues to be heavily dependent from gas supplies. That means that the country requires a reliable gas pipelines network as an important component of its energy infrastructure.
In general, the development of the national gas pipelines’ infrastructure is considered important by the central government, as well as by authorities of some major provinces of the country.
This is despite the existing strict environment commitments of the country to achieve net-zero emission target by 2050, as well as the ever-growing opposition to the further increase of gas production inside Canada. This is mainly related to environmental issues, given that Canada is already one of the world’s largest per capita producers of greenhouse gases. According to open market data, emissions grew 13.9% to 670 megatons per year from 1990 to 2022, while the growth is currently ongoing.
It is also important to note that, due to its geographical location, the process of global warming has a greater negative impact on Canada than on the majority of other developed nations. So far, climate change has already led to devastating droughts and wildfires within the country, which result in the loss of millions of hectares of local forests.
However, despite this, state support for gas producing and transmitting sectors in Canada, in recent years, has been at generally high levels. According to estimates by experts at the International Institute of sustainable Development, prior to 2022–2023, direct support for the gas pipelines sector of the country by the state was US$5 billion (C$7 billion).
Since the beginning of 2025, the situation has changed, and the authorities of some cities and provinces of the country have begun to oppose further expansion to the existing pipelines network (in addition to stopping subsidies for new gas connections).
Despite the ever-growing opposition, the development of the Canadian pipelines sector is ongoing, with generally good dynamics, which is also reflected by the announcement of some major investment projects in this field.
One of the largest of these projects is being implemented by Canadian Utilities, and it involves the building of a US$1.46-billion (C$2 billion) natural gas pipeline in Alberta, to transport natural gas to a Dow petrochemicals plant and other industrial facilities.
The company, majority-owned by ATCO, said the project, called Yellowhead Mainline, would include 124 miles (mi) (200 km) of pipeline and related control and compression facilities that will run from Peers, Alberta, to Edmonton. The construction of the pipeline will be completed by late 2027.
Building the pipeline is important as the demand for gas rises from Alberta’s industrial sector and the ever-growing population, as well as from offshore buyers, as Canada’s first liquefied natural gas (LNG Canada) export terminal is scheduled for the launch next year.
Also, Enbridge, one of Canada’s major gas pipeline operators, continues to invest in the U.S. Gulf of Mexico by building a natural gas pipeline, named the Canyon Gathering System, which will have a capacity of 125 MMcf/d and will connect to Enbridge’s existing Magnolia Gas Gathering Pipeline. In general, Enbridge has been investing heavily in the U.S. Gulf Coast in recent years, as it seeks to build a strong position to meet growing global demand for energy.
The company’s positions remain strong, despite its recently cancelled plans to build a natural gas pipeline project in northern British Columbia. As of writing, the Calgary-based company operates one the world’s longest and most complex gas transportation systems, with more than 76,428 mi (123,000 km) of natural gas pipelines in North America and the Gulf of Mexico. The company expects the demand for natural gas in Canada will remain strong, which will provide additional opportunities for growth.
“Increasing natural gas demand is being driven by LNG growth, coal-to-gas switching and the rapid increase in electric power demand stemming from new datacenter developments,” said Enbridge CEO Greg Ebel.
In addition to Enbridge, TC Energy remains another major pipeline operator in Canada and operates 57,973 mi (93,300 km) of natural gas pipelines. The company operates 653 Bcf of natural gas storage and seven power generation facilities that generate 4,300 megawatts (MW) of electricity, and it also has plans for further expansion.
In recent years, both companies have announced their plans to reduce emissions intensity and to achieve net zero emissions by 2050. This will be achieved by more active use of various energy solutions (such as renewables, to provide power for their own operations) to help with decarbonization. TC Energy plans to reduce the greenhouse gas emissions intensity of its operations by 30% by 2030 and achieve net zero emissions by 2050.
In general, Canada has a vast network of natural gas pipelines, which supply most of gas produced at Alberta fields to consuming markets in western Canada, central Canada and the U.S. According to Canadian Energy Center, Canada currently has a network of 117,000 kilometers (km) of transmission pipelines that deliver crude oil, natural gas and refined petroleum products to domestic and U.S. markets.
Regarding exports, Canada typically exports over 40% of its marketable natural gas production. The bulk of Canada’s exported natural gas is transported to the U.S. via pipelines, while a very small amount is exported by trucks or ships as compressed natural gas (CNG) or liquefied natural gas (LNG).
TC Energy’s Canadian Mainline is the longest pipeline in Canada. It extends from the NGTL system at the Alberta/Saskatchewan border across Saskatchewan, Manitoba, Ontario, and through a portion of Quebec. Among the other major pipelines are the Alliance Westcoast (also known as BC Pipeline), Foothills, Trans-Quebec and Maritimes.
Supplies to U.S.
In the meantime, the Canadian government hopes that the election of Donald Trump will provide an opportunity to further increase gas pipeline exports to the U.S. and to attract U.S. investors to build new pipelines. This would include those intended to connect to the U.S.
As for Alberta, according to recent statements made by Alberta’s Premier Danielle Smith, the government is not interested in directly subsidizing a cross-border pipeline project, preferring instead to find ways to de-risk a potential private sector investment.
“We’re looking to make connections with the United States, to see their appetite for assisting in helping to get more product going into the United States,” Smith said. “We don’t think the best way of doing it is putting government dollars into it, but we think there are other things we can do to change the risk profile.”
In this regard, there are some hopes that Trump’s arrival to power will help to revive some important joint pipeline projects, which were initiated during his first term and subsequently pended during the presidency of Joe Biden. One example is Keystone XL pipeline project, a 1,180-mi (1,900-km) crude oil transportation pipeline that would have carried oil from Alberta to the U.S. During the previous administration, Biden revoked the project’s permit due to environmental issues.
Recently, in an interview with The Canadian Press, TC Energy CEO Francois Poirier said the Alberta government has conducted consultations to see if the Keystone XL could be revived or if there are other ways to increase Alberta’s oil and gas pipeline export volumes to the U.S.
Building new cross border pipelines is acutely needed for Canada, taking into account that until now, almost all Canadian oil has been sold to the United States at a discount, mainly because of a lack of pipeline capacity and other infrastructure to ship landlocked Alberta province’s growing output.
Still, according to local analysts, implementation of these plans will be associated with serious difficulties, due to environmental and Indigenous protests, as well as cost issues.
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