In some Alberta separatists’ arguments, their big idea isn’t so much about severing the province from Canada. The goal is to fortify trade bonds with Alberta’s southern neighbour.
“We sit beside the largest economy in the world, with the shortest and lowest-cost trade routes to our most important customer,” independence leader Keith Wilson said in a social media post last week. “The problem is not geography. The problem is Ottawa control.”
It’s true that Alberta is a five-million-barrel-a-day oil powerhouse, and that more than two-thirds of that oil is piped to the United States, making it more valuable than any other export product in Canada.
But while the graphic Wilson posted shows a series of thick arrows from Alberta pointing directly south — likely for simplicity’s sake — reality looks a lot different. And that could complicate any notions of an independent Alberta easily ditching the rest of Canada to focus on U.S. trade.
The vast majority of Alberta crude is shipped through pipelines that cross into the States via other western provinces.
While three of Canada’s six transborder oil pipelines cross into the States directly from Alberta, they account for less than one-tenth of Canada’s total export pipeline capacity. The rest gets shipped through British Columbia and Manitoba.
It’s a more imbalanced map for exports of natural gas, that other major Alberta commodity. No gas pipelines go straight from Alberta into Montana; all U.S. shipments transit through other provinces.
What this means is that Alberta’s biggest economic driver would rely on products transiting through a third country to its biggest customer. That third country would be the one it just exited from, and there won’t be a guarantee Alberta’s resources would get a free ride.
“There would have to be agreements put in place. It would not be uncomplicated,” said Sonya Savage, Alberta’s former energy minister and a former pipeline executive.
Experts told CBC News that an independent Alberta and Canada may well reach a drama-free deal to let Alberta goods flow through other provinces to the United States. There’s a local model in the 1977 Pipeline Treaty that safeguards the flow of Alberta oil through midwest states toward Ontario and Quebec refineries.
But it would all be up for negotiation, like so much of a new country’s commerce and other relationships with its neighbours.
“Everything starts from scratch with a new independent country,” said Lawrence Herman, a veteran international trade lawyer and senior fellow at the C.D. Howe Institute. “They cannot just tag along on existing Canadian treaties because they wouldn’t be part of Canada.”
He said it will be immensely complex to negotiate these new deals for trade and what’s known as transshipment, which is also how Canadian goods flow south to Mexico and vice versa. Piping Alberta oil through Canada to the United States could prove more complicated than direct Alberta-U.S. flow, Herman said. But Alberta just wouldn’t know for sure until negotiations unfolded.
Even established treaties and deals aren’t necessarily ironclad, and that isn’t just referring to free-trade agreements in the Trump era. There have been threats to Central Canada’s access to Western Canada oil through Enbridge’s Line 5 pipeline — a Chippewa band in Wisconsin and the state of Michigan have both used lawsuits to threaten its closure over spill risks. A U.S. appeals court last week found Enbridge liable for trespass through Bad River Band territory, and ruled the company will have to reroute Line 5 and pay damages.
Meanwhile, Michigan’s highest court also rejected a permit for a future replacement section for Line 5 beneath the strait connecting Lake Huron and Lake Michigan, and ordered a new environmental review.
In the event the leave side wins Alberta’s fall referendum and then a subsequent secession vote, Canada could make agreeing to let U.S.-bound oil travel through Saskatchewan, Manitoba and B.C. one of its leverage points in the negotiations that would follow. But Alberta would have plenty of its own leverage to wield, including the heavy reliance by many Canadian refineries and gas distribution networks on what this current province produces.
Wilson, a lawyer who fronts the independence group Let Alberta Decide, sees other leverage points that give Alberta the upper hand as well.
“If and when Alberta becomes independent, we can negotiate from a position of strength with the other provinces,” Wilson told CBC News.
“We can reset our relationship, including the trading relationship and the mobility relationship, because British Columbia, for example, is continentally landlocked.”
There’s much talk in secession discourse about how Alberta, with no international coastline, would struggle as a landlocked country. Wilson tries to flip that argument toward the other side of the Rocky Mountains, noting that B.C. would be geographically cut off from the rest of Canada, and the rest of Canada from its west-coast ports to Asia.
Custom duties could be theoretically applied to transiting goods, or that could be threatened to pressure negotiations in other areas. If it came to it, the rest of Canada could try sourcing oil and gas from the U.S. or other foreign sources to wean itself off Alberta, suggested Andrew Leach, an energy economist and University of Alberta law professor.
“There is a normal course of events where you run a pipeline through another country and there are transshipment considerations, and those tend to be pretty seamless,” Leach said. “But this is not a situation we’ve explored before.”
Alberta’s oil and gas export pipelines through other provinces trace back to the original “Mainline” conduits for each commodity. In the 1940s and 1950s, the province was emerging as a major producer of fossil fuels. Canada approved separate oil and gas pipelines that travelled eastbound and then south, to serve both Eastern Canada customers and Americans in the midwest.
Subsequent pipelines followed similar routes, many of them straight to the refining and distribution hubs in places like Chicago and Oklahoma, rather than toward the more sparsely populated Montana, Wyoming and Idaho that sit below Alberta.
“I’m not going to go south into Montana and then cross sort of straight down and then straight across,” Leach said. “I’m going to go on a diagonal through the prairies where it’s easy to build pipelines.”
Sovereignty or issues specific to Alberta wouldn’t have been factors, he said. Convenience for shippers would, and provinces made little difference because approval of pipelines falls under federal jurisdiction.
“You know, it’s like we built infrastructure to support a country, not a province,” Leach said.
Savage, the United Conservative energy minister from 2019 to 2022, traced early Canadian pipeline regulatory history for her law-degree Master’s thesis.
From the start of the National Energy Board in the 1950s, a key consideration for pipeline approvals was ensuring Canada’s oil and gas supply first served domestic needs before surplus was exported, she said in an interview.
Energy companies would be highly reluctant to build new pipelines that skirt other provinces for the convenience of a future Alberta, Savage said. Not with a full existing system in place.
“It’s far cheaper to ship it along existing infrastructure than it is to build [new],” she said.
In fact, the new pipelines that are being planned will use existing corridors. The Alberta government’s proposed next bitumen line will follow the current Trans Mountain pipeline to a Vancouver-area port, while South Bow’s next project — the Prairie Connector — would ship oil south through Saskatchewan, largely along the Foothills gas pipeline’s corridor.
Asked about the risk of trade disruptions or potential Canadian tariffs on a separated Alberta, Wilson said that wouldn’t be any worse than one of the conditions Ottawa has placed on the latest west-coast pipeline.
Critics have warned against a condition in July’s new federal agreement with British Columbia that entitles the B.C. government to receive annual royalties from the pipeline’s operator.
“This idea that the federal government would ensure free passage of goods between provinces is a demonstrated failure,” Wilson said.
Carney won’t leverage energy exports in trade talks. Why not?
Herman said that, in the web of trade negotiations that Alberta and trading partners would have to devise “from scratch,” pipeline transshipments could prove simple, thanks to the existing interdependence on trade routes and goods.
“It may be that the rest of Canada needs Alberta oil and gas to such an extent that the government of Canada … would say, life will just go on as it was before and we’re not going to put in any obstacles to transit,” the trade lawyer said.
“That may be. We don’t know.”
