From the Canadian Energy Centre

By Grady Semmens

Expansion work underway takes on greater importance amid trade dispute

Last April, as the frozen landscape began its spring thaw, a 23-kilometre stretch of newly built pipeline started moving natural gas across northwest Alberta.

There was no fanfare when this small extension of TC Energy’s Nova Gas Transmission Limited (NGTL) system went online – adding room for more gas than all the homes in Calgary use every day.

It’s part of the ongoing expansion of the NGTL system, which connects natural gas from British Columbia and Alberta to the vast TC Energy network. In fact, one in every 10 molecules of natural gas moved across North America touches NGTL.

With new uncertainty emerging from Canada’s biggest oil and gas customer – the United States – there is a rallying cry to get new major pipelines built to reach across Canada and to wider markets.

Canada’s Natural Resources Minister Jonathan Wilkinson recently said the country should consider building a new west-east oil pipeline following U.S. President Donald Trump’s threat of tariffs, calling the current lack of cross-country pipelines a “vulnerability,” CBC reported.

“I think we need to reflect on that,” Wilkinson said. “That creates some degree of uncertainty. I think, in that context, we will as a country want to have some conversations about infrastructure that provides greater security for us.”

Many industry experts see the threat to Canada’s economy as a wake-up call for national competitiveness, arguing to keep up the momentum following the long-awaited completion of two massive pipelines across British Columbia over the last 18 months. Both of which took more than a decade to build amidst political turmoil, regulatory hurdles, activist opposition and huge cost overruns.

On May 1, 2024, the Trans Mountain pipeline expansion (TMX) started delivering crude oil to the West Coast, providing a much-needed outlet for Alberta’s growing oil production.

Several months before that, TC Energy finished work on the 670-kilometre Coastal Gaslink pipeline, which provides the first direct path for Canadian natural gas to reach international markets when the LNG Canada export terminal in Kitimat begins operating later this year.

TMX and Coastal GasLink provide enormous benefits for the Canadian economy, but neither are sufficient to meet the long-term growth of oil and gas production in Western Canada.

More oil pipeline capacity needed soon     

TMX added 590,000 barrels per day of pipeline capacity, nearly tripling the volume of crude reaching the West Coast where it can be shipped to international markets.

In less than a year, the extra capacity has enabled Canadian oil production to reach all-time highs of more than five million barrels per day.

More oil reaching tidewater has also shrunk the traditional discount on Alberta’s heavy oil, generating an extra $10 billion in revenues, while crude oil exports to Asia have surged from $49 million in 2023 to $3.6 billion in 2024, according to ATB analyst Mark Parsons.

With oil production continuing to grow, the need for more pipeline space could return as soon as next year, according to analysts and major pipeline operators.

Even shortly after TMX began operation, S&P Global analysts Celina Hwang and Kevin Birn warned that “by early 2026, we forecast the need for further export capacity to ensure that the system remains balanced on pipeline economics.”

Pipeline owners are hoping to get ahead of another oil glut, with plans to expand existing systems already underway.

Trans Mountain vice-president Jason Balasch told Reuters the company is looking at projects that could add up to 300,000 barrels per day (bpd) of capacity within the next five years.

Meanwhile, Canada’s biggest oil pipeline company is working with Alberta’s government and other customers to expand its major export pipelines as part of the province’s plan to double crude production in the coming years.

Enbridge expects it can add as much as 300,000 bpd of capacity out of Western Canada by 2028 through optimization of its Mainline system and U.S. market access pipelines.

Enbridge spokesperson Gina Sutherland said the company can add capacity in a number of ways including system optimizations and the use of so-called drag reducing agents, which allow more fluid to flow by reducing turbulence.

LNG and electricity drive strong demand for natural gas

Growing global demand for energy also presents enormous opportunities for Canada’s natural gas industry, which also requires new transportation infrastructure to keep pace with demand at home and abroad.

The first phase of the LNG Canada export terminal is expected to begin shipping 1.8 billion cubic feet of gas per day (Bcf/d) later this year, spurring the first big step in an expected 30 per cent increase in gas production in Western Canada over the next decade.

With additional LNG projects in development and demand increasing, the spiderweb of pipes that gathers Alberta and B.C.’s abundant gas supplies need to continue to grow.

TC Energy CEO Francois Poirier is “very bullish” about the prosect of building a second phase of the recently completed Coastal GasLink pipeline connecting natural gas in northeast B.C. to LNG terminals on the coast at Kitimat.

The company is also continuously expanding NGTL, which transports about 80 per cent of Western Canada’s production, with more than $3 billion in growth projects planned by 2030 to add another 1 Bcf/d of capacity.

Meanwhile Enbridge sees about $7 billion in future growth opportunities on its natural gas system in British Columbia.

In addition to burgeoning LNG exports from Canada, the U.S. and Mexico, TC Energy sees huge potential for gas to continue replacing coal-fired electricity generation, especially as a boom in power-hunger data centres unfolds.

With such strong prospects for North America’s highly integrated energy system, Poirier recently argued in the Wall Street Journal that leaders should be focused on finding common ground for energy in the current trade dispute.

“Our collective strength on energy provides a chance to expand our economies, advance national security and reduce global emissions,“ he wrote in a Feb. 3 OpEd.

“By working together across North America and supporting the free flow of energy throughout the continent, we can achieve energy security, affordability and reliability more effectively than any country could achieve on its own.”

Resource Works CEO and founder Stewart Muir has laid out the conditions for Canada to realize its potential

How can Canada fully realize its energy potential?

Stewart Muir – CEO of Resource Works – often speaks about this question. According to Muir, Canada’s abundant natural resources, skilled workforce, and high standards give us a strong foundation to build on. But to translate these strengths into true economic and environmental leadership, a few key conditions must be met.

Below are five key conditions Muir highlights (especially regarding LNG and oil development) that can help Canada seize its energy opportunity:

Streamlined & Efficient Regulation – Unnecessarily lengthy and unpredictable approval processes have stalled projects and scared away investors. Muir advocates cutting red tape and speeding up decisions so that government isn’t working “at cross purposes” with industry . Reforming Canada’s permitting and regulatory processes would make energy projects more viable and globally competitive, allowing development to proceed faster without compromising standards.

Strong Indigenous Partnerships – Canada’s energy future needs to be built in true partnership with Indigenous peoples. Muir points out that First Nations are increasingly co-leading resource projects, with over 500 economic and reconciliation agreements in British Columbia alone. Embracing Indigenous leadership – through equity partnerships, consultations, and benefit-sharing – not only advances reconciliation but also creates certainty and shared prosperity for energy developments. Projects move forward best when Indigenous communities are on board as genuine partners.

Robust Infrastructure & Market Access – To capitalize on our resources, Canada must expand and modernize the infrastructure that gets energy to market. That means building and upgrading pipelines, ports, and LNG terminals. The recent completion of the Trans Mountain Expansion (TMX) pipeline is a proof point – it’s already moving Canadian oil to U.S. and Asian buyers , helping fetch better prices. Muir and others argue we also need to develop new LNG capacity, including on the East Coast, to supply allies in Europe . By investing in strategic infrastructure, Canada can ensure its oil and gas reach global markets efficiently and safely, turning resource potential into real economic growth.

Proactive Global Market Positioning – Canada has to seize its moment in the global energy market. Demand for energy is skyrocketing worldwide, yet Canada hasn’t fully stepped up to meet it. For example, when allied nations like Germany and Japan turned to Canada for LNG in recent years, they left empty-handed for lack of a “strong business case” to export gas. Meanwhile, other suppliers (the U.S., Qatar, etc.) eagerly filled those needs. Muir emphasizes that Canada must proactively position itself as a reliable exporter – or risk being left behind while others grab the opportunity. That means securing long-term contracts and building trade relationships so Canadian LNG and oil can become go-to choices in Asia, Europe, and beyond. In short, we need to act with urgency on the world stage to claim our share of the market.

Public Confidence through Environmental Leadership – Earning public trust is essential for any energy project to succeed. Canadians need to see that resource development can coexist with high environmental standards and climate responsibility. Muir notes that strengthening public confidence in energy and mining projects could help “preserve and unlock” the economic value of Canada’s huge reserves, and even position Canada as a leader in how to do resource development right. This means being transparent, engaging communities early, and upholding world-class environmental protections. Canada’s own track record shows that responsible resource development is not just possible – “it’s our forte”. By leading with strong environmental performance (for instance, using clean technology and cutting emissions per barrel), project developers can build the social license to operate. In turn, this public trust enables more projects to move ahead, aligning economic growth with our climate and environmental commitments.

Bottom Line: Muir’s vision suggests that if Canada delivers on these conditions – from faster approvals and better partnerships to smarter infrastructure and trust-building – we can translate our natural advantages into both prosperity and sustainability. Canada has the resources and know-how; now it’s about having the will to act.

By focusing on these key areas, Canada can become not only an energy powerhouse at home, but also a global example of economic and environmental leadership in responsible energy development.