Carney bets on LNG, Alberta doubles down on oil

Carney is promoting LNG as Canada’s future. Alberta insists the future still runs through oil

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Prime Minister Mark Carney is a man in a hurry. He’s fast-tracking energy megaprojects to position Canada as a global LNG powerhouse, but Alberta’s oil ambitions and the private sector’s U.S. focus could throw his plan off course.

It’s all part of a broader federal strategy to reframe Canada’s energy priorities and show that his government is delivering economic results. Some say the motivation is political, with a fragile minority government and the potential for a snap election. Others say it’s about legacy: Carney wants to be remembered as the prime minister who put Canada back on the global energy map.

That ambition came into sharper focus last week. On Thursday, he announced a second wave of projects being sent to the federal Major Projects Office, a body set up to fast-track infrastructure Ottawa sees as vital to national priorities.

The new list includes the Ksi Lisims liquefied natural gas project and the North Coast Transmission Line in British Columbia, along with a hydroelectric project in Nunavut. It also features nickel, graphite and tungsten mines in Ontario, Quebec and New Brunswick.

Ksi Lisims is the second LNG project Ottawa has submitted to the Major Projects Office.

Carney’s goal is clear, according to Lisa Baiton, president of the Canadian Association of Petroleum Producers. “With Ksi Lisims LNG and the related Prince Rupert Gas Transmission project joining LNG Canada Phase 2 on the major projects list, paired with Cedar and Woodfibre LNG, which are already under construction, Canada is on a path to become one of the top five LNG exporters in the world,” she said in a statement.

But not everyone is on the same page, especially Alberta.

The first batch of fast-tracked projects, announced two months ago, included a Montreal port expansion, a small modular nuclear plant in Ontario, mining projects in Saskatchewan and British Columbia, and LNG Canada Phase 2.

Alberta’s proposed oil export pipeline project was on neither list.

Premier Danielle Smith had said she hoped an agreement with Ottawa would be finalized by early last week to allow a new bitumen pipeline to proceed. That didn’t happen. But in a statement last Wednesday, her office said “sensitive” negotiations are continuing.

“Currently, we are working on a (memorandum of understanding) agreement with the federal government that includes the removal, carveout or overhaul of several damaging laws chasing away private investment in our energy sector, and an agreement to work towards ultimate approval of a bitumen pipeline to Asian markets,” the statement said.

Alberta argues such pipelines are critical if Canada is serious about energy diversification and global exports, particularly to Asia, where demand is rising. So far, those arguments don’t appear to have moved Carney.

With no federal deal in place, the industry is moving ahead with its own export agenda by doubling down on the U.S. market.

Enbridge has approved $1.4 billion in upgrades to its Mainline and Flanagan South pipelines, adding 250,000 barrels per day of capacity to move Canadian crude to the U.S. Midwest and Gulf Coast. The expansion is expected to come online in 2027.

The company also plans to test commercial demand in 2026 for a second phase of Mainline expansion that could add another 250,000 barrels per day.

Colin Gruending, Enbridge’s president of liquids pipelines, said the U.S. remains the most logical export market for Canadian oil, followed by Asia via the West Coast. The federal government’s goal of reducing reliance on U.S. buyers may take time.

Trans Mountain Corp., which moves oil sands crude to the Vancouver area for export, is reportedly also considering ways to increase volumes quickly and affordably.

Keystone XL, the pipeline project killed by former U.S. president Joe Biden in 2021, may also be back in play. The existing Keystone system, now owned by South Bow Corp., moves Canadian oil to U.S. Gulf Coast refineries. The cancelled XL expansion would have added new pipe and a more direct route south.

Whether Carney’s push makes Canada an LNG superpower or hits a wall of regional resistance and market reality, the energy and political maps are shifting.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.