Why Canada should heed its Energy Minister’s call to calm down about oil pipelines

 Mar. 8, 2025

Despite the security dangers posed by U.S. President Donald Trump, there is no way a new – or resurrected – pipeline project would be completed in less than five years

Jonathan Wilkinson would like everyone to take a deep breath, when it comes to one of the biggest, costliest and riskiest ways that Canada could try to assert its energy independence in the face of Donald Trump’s threats.

"People are getting way too ahead of themselves on the oil conversation," the federal Energy and Natural Resources Minister said in an interview this week. "Everybody’s sort of running around saying, ‘Oh my God, we need a new pipeline, we need a new pipeline.’ The question is, well, why do we need a new pipeline?"

That’s indeed something that Canadians – suddenly expressing strong majority support for a revival of the long-dormant Energy East pipeline proposal to bring Alberta oil to Atlantic Canada, while Alberta Premier Danielle Smith touts newfound enthusiasm among provincial governments – would do well to ask themselves right now.

The answer they may land on – as Mr. Wilkinson apparently did, after suggesting a month ago that it was time for a national conversation about projects such as Energy East – is that the economic case is tenuous at best. And rather than treating cross-country oil infrastructure as the white whale of Canadian energy sovereignty, attention is better focused on other types of resource projects with a stronger chance of strengthening this country’s hand.

For starters, despite all the political noise, there is no indication of serious private-sector interest in this scale of new oil infrastructure. TC Energy, the original Energy East proponent which abandoned its plans in 2017 citing regulatory obstacles and high costs, is no longer in the pipeline business. And nobody else has yet stepped up to try to advance a project that was expected back then to cost $15.7-billion, and would probably run much higher, considering that the one major oil pipeline investment here in recent decades – the Trans Mountain expansion – cost $34-billion.

That suggests enormous subsidies would be required to attract the capital, if not outright government ownership. The rationale would have to be that given the security dangers posed by Mr. Trump, Canada can no longer rely on oil from the U.S., or flowing through the U.S., to supply eastern provinces.

But as Mr. Wilkinson noted, there is no way a pipeline would be completed in less than five years. That wouldn’t make it much help with the threat posed this decade by Mr. Trump. And by then, the shift toward electric vehicles – which Mr. Trump may slow, but won’t stop outright as those vehicles get cheaper – could mean less oil is needed.

That also helps explain why proponents have yet to step forward to revive the Northern Gateway pipeline in Western Canada, which would decrease reliance on the U.S. as a customer for Canadian oil by expanding reach to Asian markets. Maybe global oil demand won’t start declining by 2030, as the International Energy Agency predicts. But placing a huge bet against it happening next decade isn’t wildly appealing.

Meanwhile, there are so many better bets to be placed – first and foremost on Canada’s almost limitless supply of minerals (lithium, nickel, cobalt, graphite and some 60 more) for which demand will only rise during the energy transition and there is a backlog of proposed projects.

The notion that developing those resources will enable a Fortress North America, to combat Chinese dominance of supply chains, has gone out the window courtesy of the U.S. ceasing to be a reliable partner. But that only adds to the urgency, since demand for the minerals in most major economies across Asia and Europe makes for a prime opportunity to decrease trade reliance on the U.S., even as they’re also used as bargaining chips with Mr. Trump.

Mr. Wilkinson can point to various policies under his government’s 2022 critical minerals strategy, including $700-million in public spending, that has contributed to a surge in activity around not just extracting minerals, but starting to build capacity to process them domestically. Just this week, there were signs of progress toward a proposed lithium refinery in Thunder Bay.

But he also acknowledged there’s a lot more that could be done. That includes finally synchronizing federal and provincial permitting processes to reduce endless delays, upping infrastructure spending around potential mines, and possibly adding to Ottawa’s new Indigenous loan guarantee program with a fund specifically for equity in mining projects.

Not that getting more minerals to market is the only practical energy-related response to the Trump era.

Mr. Trump’s attempts to roll back his predecessor’s financial supports for low-carbon industries could make it easier for Canada to compete for investments in everything from renewable electricity and storage to bolster the power grid, to sustainable fuel production, to carbon capture and removal.

Leveraging already resurgent domestic development of new nuclear reactors could serve both our own energy-security needs and those of increasingly anxious overseas allies.

And if increasing fossil-fuel exports is an objective, there is a chance to build off recent momentum in market diversification for Canadian natural gas, including the nearly operational LNG Canada export terminal in Kitimat, B.C. Relative to oil, that sector may have more durable demand because of gas’s use for power generation and heating rather than primarily transportation. Plus, there are comparatively serious discussions under way about additional projects, including a second LNG Canada phase.

None of the projects in any of these spaces would on their own match the symbolic nation-building impact, nor feed the desire for a bold response to Mr. Trump, as somehow resurrecting a pipeline that’s been dead for almost a decade.

That means Mr. Wilkinson may be inviting some backlash, by pouring cold water. But if so, perhaps it’s best to get the finger-pointing out of the way now, then focus squarely on the stuff that can actually get done.