ABUSING ALBERTA

Nov 8, 2025
12 min read

Updated: Jan 2

Danielle Smith: Alberta govt to back proposed pipeline to BC's coast - Global News

I keep reading about proposals for more pipelines to the BC coast from Alberta. Not only is all of this politics getting pretty interesting but I actually studied Alberta's oil and gas industry a little in college (and even held bitumen in my hand) and have also lived in Alberta, too, among the office towers of the oil giants. So, what comes to mind for me when there’s any talk of pipelines is what isn't commonly mentioned. That's just the little bit of history and economics we all agree upon (not the ravings of ecowarriors from coastal villages but the stuff showing up in petroleum producers' presentations, on the regulator's website, and in formal communication from the province of Alberta). I spell all this out here because I continually have conversations with pipeline proponents who reject all of this or know none of it despite every word coming from the very sources they would call upon.

TL;DR

Canada performed the first geological surveys of what is today Alberta
The first productive oil well was drilled there in 1902, prior to Alberta becoming a province
Commercial oil and gas production began in 1914
In 1930 Canada granted Alberta rights to those non-renewable resources
The Ontario-based Imperial Oil was producing 1,000 barrels a day in Leduc, Alberta by 1947
A major pipeline to the Great Lakes was competed in 1950
That pipeline and its tributaries became the largest in North America in 1963 and by the 1970s it was pumping more than a million barrels a day
By the 2000s, Alberta's major pipelines were moving two million barrels a day in all directions and by 2013 they were hitting three million
In BC, pipeline capacity nearly tripled with the completion of the Trans Mountain Extension line in 2024 and export capacity to tidewater was up almost 700%
By late 2024, Alberta was producing 4.5 million barrels per day and exporting around four million barrels daily
Alberta has enough pipelines under regulation to circle the Earth nearly a dozen times
Had Alberta taken oil revenues at rates similar to other nations, even the most conservative investments would have yielded a sovereign wealth fund worth trillions by now. It decided instead to save nothing and make oil companies rich
The little money collected in over a century has been chronically mismanaged, dumped into risky investments, and even declined 10% at the same time oil prices hit at all-time highs
Despite being required by law, almost none of the funds needed to decommission and clean-up Alberta's oil and gas wells and mining operations have been put aside
The regulator recently let slip that if industrial operations stopped today the taxpayer burden could be somewhere between $100-300 billion and that with current technology clean-up could take thousands of years to complete (but those estimates are conservative and forwarded by the same people who've failed to collect the needed funds or push for the development of better technology)
We know what is coming. This whole scenario is premised and mirrored by the uranium industry in northern Saskatchewan. Having made their money, all the companies walked away leaving provincial and national taxpayers with the real costs of doing business

DISCOVERY, PRODUCTION, AND EXPORT

As a starting place, when was the first geological survey of Alberta conducted and who funded it? The Geological Survey of Canada, under John Macoun and funded by the federal government, made five expeditions to present-day Alberta starting in the 1870s. On recommendations from the Geological Survey of Canada, Parliament then provided $7,000 ($260,000 in today's dollars) for drilling in the Athabasca region starting in 1894.

The first productive well was drilled in the region in 1902. When Alberta became a province in 1905, Canada maintained control of all lands, minerals, and mines — which it did largely to accrue revenues to fund infrastructure such as railways to the West. Commercial oil production kicked off with local companies drilling dozens of wells across the south of the province, near the southern border at Cameron Creek and in the foothills south of Calgary and soon many more locations.

Once production boomed and infrastructure was built, negotiation began on transferring control of oil and gas rights to the province. Alberta took over control with the Natural Resources Transfer Agreement in 1930. From there, a major seismic survey was conducted across Alberta by Imperial Oil, in 1946, and the following year they were drilling dozens of wells producing up to 1,000 barrels a day, near the town of Leduc, in central Alberta. By 1949 the Interprovincial Pipe Line Company received a charter from the federal government and started constructing their first export line. By 1950 they’d completed the project, 2,000kms to Wisconsin through Saskatchewan, North Dakota, Minnesota to the western shore of Lake Superior.

By 1952 there were almost 900 wells in the region of the Leduc field and the following year the Trans Mountain Pipeline was completed, across 1,150kms, transporting oil from Edmonton to the coastal terminal at Burnaby, BC and moving 150,000 barrels per day — defying countless skeptics doubtful anyone could possibly construct a pipeline across the Rockies, the most challenging landscape in North America. Expansions to the eastern line over the next decade saw pipelines go to Sarnia, Detroit, Buffalo, and Chicago. This made the Interprovincial Pipe Line the largest carrier of crude in North America by 1963, with deliveries topping one million barrels per day by 1972.

With many large and small busts and booms over the following fifty years, still more pipelines and new tributaries to existing lines continued being built. Over the last 20 years alone distribution has soared. In 2007 the major export pipelines (Enbridge Mainline, Keystone, and Trans Mountain) along with rail routes, were moving around two million barrels per day. That rate was up to three million by 2013 and by the end of 2024 they were over four million barrels per day.

To speak just of their transit through BC alone, Trans Mountain began building its expansion to their existing line in 2018. That was completed and became fully operational in 2024. That new volume has meant, as Statistics Canada spells out, average pipeline movements of crude oil and equivalent products increased between BC and Alberta nearly fivefold while export capacity to tidewater in western Canada is now up almost 700%.

"Pipeline movements from Alberta to British Columbia"

THE BRUTAL OPPRESSION OF ALBERTA

Knowing all this, then, with no disputes of any kind about these numbers, is how we arrive at regular cries coming from Albertans that their oil and gas exports (and entire economy and that of Canada as a result) are being egregiously suppressed, now as in the past, particularly by British Columbia and the federal government. Most commonly what I hear is that there are not enough pipelines or rail transmission. Okay. So how much is enough? Well, they can never say. What they do know is that there definitely are not enough and someone else is to blame. Well, as Alberta's energy regulator explains (and everyone else in the sector agrees), the length of existing pipelines of all sorts and sizes under regulation is "451,000km and growing." That sounds like a lot of pipe. And it is. But how much is it? Well, as I have spelled out before, the circumference of the Earth is just 40,075km. So Alberta has enough oil and gas-related pipe to wrap around the planet more than 11 times, with enough left over to run a separate line directly from Calgary to Beijing. Right. Of course, we also know pipelines are not the only means by which oil and gas products can be transported. As the good people of Lac-Mégantic, Quebec can attest, crude oil and natural gas also travels by train. Run by two separate train companies, there already exist four lines into BC, one to the Northwest Territories, five to Saskatchewan, and one to Montana capable of carrying Alberta’s exports. Though the volume is low, there’s not much more freight capacity nor is there economic justification or political will for expensive upgrades or expansion to existing rail lines. This is especially true when we've been moving away from the technology here for generations and Alberta killed off all its passenger and intercity rail as recently as 1990.

It’s very hard, regardless, to get most Albertans to look at any of these numbers — numbers presented by the petroleum producers themselves, the local energy regulator, their own conservative provincial government, and Statistics Canada. Still, undaunted, they look at all this and arrive at the conclusion that the only solution to be found is for the province to declare statehood (or occasionally abandoning Canada for the US). Proponents offer me things like “it’s better to be separated as international law would guarantee our products get to port.” So, is that true and would leaving Canada or joining the US make any sense?

International law is, in spirit, formulated to ensure every nations’ rights to international markets. In practice that has never been the case. That’s because one nations’ rights to move product has never, and will never, trump the environmental, economic, political, or strategic rights of the nation folks seek to transit. That applies when those goods are running shoes or roofing tiles but comes laden with consequences when you're talking about the toxic and volatile products of the petroleum industry and when all oil and gas lines and transport vessels continually leak (when contractors aren't piecing them with digging equipment, as happened in Burnaby in 2007) and or regularly derail and explode… If you doubt that, I can assure you we see this manifest in landlocked nations being among the poorest on Earth, even those with significant oil reserves such as Chad and Turkmenistan. And those landlocked nations who are rich do not have a wealth of natural resources but are those tiny nations embedded within Europe, like Luxembourg and Switzerland (who also operate by secretive banking laws allowing them to form the backbone of global trafficking and financial crimes operations as well as pseudo-legal tax and regulation sheltering). Aside from adding international borders to all sides of the province being among the silliest ideas ever entertained, we know that the US does not need Alberta’s oil and gas, has become protectionist around its resources, and could never justify taking on its tremendous debts related to petroleum production.

“DEBT? WHAT DEBT?”

Nearly a century after Alberta, Norway began serious oil extraction. With exploration of the North Sea beginning in the 1950s, by ‘69 a discovery was made and production began in 1971. Unlike Alberta, their oil was not pouring out of the ground but 100-300kms out to sea, 150 metres below the surface, and 3-6km beneath the seafloor. And, while Alberta has the fourth largest petroleum reserves in the world, roughly 165 billion barrels, Norway is 20th with an estimated 8 billion barrels. (To compare elsewhere, Alaska has 3.5 billion barrels and Saudi Arabia 260 billion.) Right away, Norway established state control and began putting money aside, forming a sovereign wealth fund with revenues managed through the Government Pension Fund Global. Alberta did nothing of the sort. Instead of saving, Alberta preferred to allow oil companies, mostly multinationals, to take all the profits. Eventually, in 1976, they did form the Alberta Heritage Savings Trust Fund, with a commitment to deposit 30% of annual non-renewable resource revenues. But by 1983 the mandated contribution was slashed to just 15% and then halted entirely in 1987 — effectively capping savings at $12.7 billion. At the same time the provincial government saw the fund not as long term savings, spending just a fraction of the interest earned as any sane actor would, but as income to be spent. They used the funds to cut taxes and even to build a golf course. While the fund accepted revenues for a brief time, from 2005 to 2008 when global oil prices hit an all-time high, it actually lost $3 billion by 2009.

Though that same $12 billion in 1987 would be worth $23 billion in 2014 dollars on inflation alone, the fund was listed at a “fair market value” of just $17.5 billion that year. The following year, the Calgary Chamber of Commerce estimated that had they followed Alaska’s savings model the Heritage Savings Trust Fund would have closer to $45 billion and closer to $165 billion if they’d modelled themselves after Norway’s publicly managed fund. Now remember, Alberta has had commercial oil production for 120 years. Imagine if Alberta started saving in just 1946 instead of ‘76! Just the inflation on a billion in 1946, when Imperial Oil and others had nearly a thousand wells on Alberta soil, would be worth the same amount as the fund is currently worth. Though I don’t know anything about money that looks to me like, with compound interest and only doing as well as the 10-12% average of the S&P 500, say, Albertans should be up more than $4 trillion… Eeek.

Though the chronic mismanagement has been well-documented and acknowledged, the fund lost money again and was down to $16 billion in 2020. Where is Alberta’s fund at n 2025? Roughly $27 billion (or $3 billion shy of what the inflation calculator says $12.7 billion in 1987 would be worth in 2025). By contrast, Norway’s sovereign wealth fund has breached $2.1 trillion, becoming the most powerful financial entity on Earth.

“All of that is interesting. Sure. Okay, Alberta didn’t rake in revenues for itself; but that’s not debt. What about the debts you mentioned?”

The public statements from the Alberta Energy Regulator and the provincial government provide estimates for the size of and clean-up costs to decommission, remediate, and reclaim many generations of all of this impossibly large and dirty industrial development. Today oil sands production alone covers 142,200 square kilometers of Alberta, making it a significantly larger area than England, Liberia, Honduras, or South Korea. And we are told the number of oil and gas wells covering the rest of the province number in the hundreds of thousands, with continued growth. So, for example, the applications for new wells just in 2025 hit 26,700, with 8,300 new wells drilled. There were 153,800 active and marginal (only producing a trickle) and another 78,000 inactive, resulting in more than 230,000 needing decommissioning, remediation, and reclamation.

To do that work the province set up the Orphan Well Association. Not only is the association underfunded despite mandates, just like Alberta’s sovereign wealth fund, but just recently, in August 2025, the OWA President, Lars DePauw, offered that the task doesn’t even seem doable. "In some previous years,” Lars explained, “the OWA has been able to decommission about 1,000 wells a year. That's sort of our peak, and so we are expecting to ramp up to that level again." How does that eat into the 230,000 existing wells or even just new ones coming online? It doesn’t. And that’s not clean-up for pipelines or oil sands mining operations.

So, that’s just the size and the physical impossibility of it. Then there’s the cost. Though the industry is now collecting $132 million per year toward these efforts the total deposits to date (over 120 years or 50, depending how generous you want to be) has arrived at just $1.6 billion. I say “just $1.6 billion” because that looks to be only 0.6% of what’s currently needed, you know, if there isn’t continued expansion. Originally the industry was publicly suggesting clean-up costs in the range of $30 billion. Eventually internal documents made public through a freedom of information request in 2018 found they Alberta’s energy regulator was providing industry insiders worst-case scenario estimates for Alberta’s liabilities to be almost nine times their public evaluations: “$130 billion for mining projects, $100 billion for conventional oil and gas and steam-driven oilsands, and $30 billion for pipelines.” That’s right $260 billion. Others suggest the bill will only be half that. Still, where will any of that money come from?

Adjusted for inflation, in 2008 oil reached almost $190 a barrel while the recent low dropped to $14 in 2020. (Today it is at $61 with the average since 2000 being $79 and since 1946 landing around $58). And with preferable alternatives to non-renewable oil and gas coming online all the time it’s hard to understand how oil prices will shoot up to historic highs again, or even go above $100. But we have better estimates than my own intuition about global markets. When the cost overruns on the Trans Mountain Expansion pipeline in BC reached $34 billion, we were told by various independent sources (including organizations like the Parliamentary Budget Office, Finance Canada, and the Institute for Energy Economics and Financial Analysis) project will likely never cover its construction, operating, and debt costs taken up by the Trudeau government on behalf of Canadian taxpayers. But $260 billion (or merely $123 billion) will somehow be an easy cost to recover? It looks more like the children and grandchildren of Canadian taxpayers will be trying to figure out how to pay for Alberta’s mess.

And why can we be sure that will happen? Well, this whole scenario has already played out in Saskatchewan. The uranium industry in the north of that province kicked off after deposits were discovered on the edge of Lake Athabasca (way up at 59°N) in the 1930s and the resource became commercially viable with industrial and military applications for nuclear fission after 1939 (though most of what was mined in Canada went into American weapons). Things really got going in the 1950s and around those mining sites grew Uranium City, at that time the fastest growing city in the region. The town had itself a post office and school, a mall and bowling alley, the requisite curling rink, and even an airport. By 1956 the uranium mine had become the world's largest, with operations running 24/7. In 1963, after extracting five million tons of uranium ore, the company, Gunnar Mining Ltd, simply walked away from the mine and mill site and the town supporting it with no obligations. And all of it shut down without any remediation or basic decommissioning, leaving physical, biological, chemical, and radiological hazards aplenty. Today there remains millions of tons of uranium-laden tailings, waste rock, asbestos, and acid pits all blowing in the wind and leaching into the near-by lake, all of which has proven impossible to keep people and animals away from. Clean-up was originally estimated to be in the range of $25 million. But nothing was done at the time. Some work has begun in recent decades but the same work looks like it will cost closer to $300 million to get to completion. And who is going to pay for that? The province of Saskatchewan will share the burden with the people of Canada. Classic.