Analysts Say New West Coast Pipeline Faces Long Odds

CIBC Capital Markets analysts are casting doubt on the likelihood of any private-sector push to build a new West Coast pipeline, citing deep political and legal challenges that have historically delayed or derailed similar projects. The report follows the recent memorandum of understanding (MOU) signed between Alberta and the federal government, aimed at advancing energy development and infrastructure cooperation.

Policy Gaps and Legal Uncertainty Remain Major Obstacles

According to the CIBC report, the MOU lacks the judicial reforms needed to prevent repeat legal challenges like those that stalled Northern Gateway and the Trans Mountain expansion. The analysts point to the federal Building Canada Act—which introduced a new Major Projects Office—as still “untested,” creating uncertainty about its ability to streamline nation-building infrastructure.

They emphasize that consultation with British Columbia and Indigenous communities is both essential and currently a major barrier. Without meaningful alignment among Alberta, B.C., and First Nations, analysts believe no major energy company is likely to take financial leadership on a politically sensitive project of this scale.

Industry Cost Pressures Add to the Risk

Beyond the political hurdles, cost concerns are another major factor. BMO Capital Markets managing director Randy Ollenberger recently questioned how cost overruns ballooned for both the Trans Mountain expansion and Coastal GasLink. He warned that no producer will support a pipeline with a price tag approaching “$100 billion.”

Former Alberta premier Jason Kenney also raised concerns about rising carbon pricing and its long-term impact on the competitiveness of Canada’s oilsands sector. He argued that competing global producers face far fewer regulatory and economic burdens, putting Canadian projects at a disadvantage.

A West Coast Pipeline Remains Important—but Far Off

While analysts agree that a West Coast pipeline could strengthen Canada’s energy sovereignty, they caution that the path forward is likely to be long, complex, and expensive. For now, the private sector appears unwilling to champion the project without significant government alignment, financial incentives, and streamlined regulatory processes.