The race for Canadian crude's next exit route is closer to a finish line than most realise
A race to unlock Canada's landlocked crude is accelerating and the terms of that race will determine where tens of billions in energy investment flows next.
Reuters, citing four sources familiar with the matter, reported that South Bow Corp and its US partner Bridger Pipeline are close to securing the shipper commitments needed to proceed with an Alberta-to-Wyoming pipeline.
Oil companies have already committed to move at least 400,000 bpd — about 72 percent of the line's initial 550,000 bpd capacity — with South Bow and Bridger targeting contracts for roughly 450,000 bpd, the threshold pipeline operators typically need before breaking ground.
The project would eventually handle up to 1.13m bpd, according to a Bridger regulatory filing.
One source told Reuters that committed shippers include Cenovus Energy, Canadian Natural Resources, Tamarack Valley, Whitecap Resources, and Strathcona Resources.
Trump signed a cross-border permit for the project last Thursday. The approval stands in stark contrast to 2021, when president Joe Biden killed Keystone XL.
Tudor Pickering, Holt & Co. analysts wrote in a note cited by Reuters that the South Bow-Bridger proposal ranks among the most economic options for adding Western Canadian export capacity before 2030.
They flagged, however, that Guernsey, Wyoming is not an end market, meaning additional links to Cushing, Patoka, and the US Gulf Coast would still need to be built.
The push for new export routes comes as two of Canada's largest oilsands producers reported strong first-quarter earnings while warning that growth has a ceiling without new pipeline infrastructure.
According to BNN Bloomberg, Cenovus posted net earnings of $1.57bn, or 83 cents per share, up from $859m a year earlier, and raised its base dividend 10 percent to 22 cents per share
Canadian Natural Resources, according to OilPrice.com, reported total production of 1.64m barrels of oil equivalent per day, with its Jackfish thermal project hitting a record 134,396 bpd — above nameplate capacity.
Both CEOs delivered the same message.
Cenovus chief Jon McKenzie told analysts Wednesday that Canada's energy dialogue has been “myopically focused on the climate agenda,” BNN Bloomberg reported.
National policies and regulations have made resource development and investment in Canada “uncompetitive with the rest of the world,” he said.
Canadian Natural CEO Scott Stauth told analysts the company needs new pipeline capacity “to be able to grow oil sands in a significant way,” OilPrice.com reported.
Its proposed 150,000 bpd Jackpine expansion stays on hold until that confidence materialises.
McKenzie also flagged a structural problem: the Alberta-Ottawa MOU that outlines a path to a new West Coast pipeline contains no policies to incentivise the greenfield production needed to fill it.
McKenzie warned that greenfield development carries “a higher cost and a higher break-even” than past growth. No private-sector player has yet committed to building the line, though Alberta is preparing a regulatory filing, BNN Bloomberg reported.
Hanging over all of it is an unresolved carbon price dispute.
The MOU includes a rise in Alberta's industrial carbon price from $95 a tonne to an effective $130 a tonne — a roughly 50-cent-per-barrel hit on average, per a Canadian Climate Institute analysis cited by the same outlet.
The Oil Sands Alliance, which includes Cenovus, warned in a statement earlier this week that the levy would “limit our industry's ability to attract investment and grow.”
BNN Bloomberg reported six climate advocacy groups countered in a letter to Carney on Tuesday, calling the carbon price increase the most critical element of the MOU and urging that the target be reached by 2030, arguing tens of billions in low-carbon investment hang in the balance.
Both Alberta and Ottawa have blown past their self-imposed April 1 deadline, with the Globe and Mail, citing unidentified provincial and federal sources, reporting Wednesday that the pace of the price increase remains the main sticking point, though headway is being made.
CTV News confirmed the federal government intends to table legislation that would compress major energy and infrastructure approvals to a two-year window.
The move goes further than Bill C-5, which Carney passed less than a year ago to fast-track projects deemed in the national interest.
Alberta's own expedited 120-day approvals act cleared the legislature unopposed this week.
Conservative leader Pierre Poilievre called Ottawa's plan an illusion at the Canada Strong and Free Network conference Thursday, saying Carney has not removed “a single Trudeau-era anti-development law” or used Bill C-5 to approve any projects.
Carney is set to meet Alberta premier Danielle Smith in Ottawa on Friday, the article added.
