Canadian Energy Centre
What’s next? With major projects wrapping up, what does Canada’s energy future hold
From the Canadian Energy Centre
By Mario Toneguzzi‘This is the first time Canada will enter the global marketplace as a global player, so it is an incredibly important change for the industry’
With the recent completions of the Trans Mountain expansion and Coastal GasLink pipelines, and the looming completion of LNG Canada within the next year, there are few major energy projects with the green light for one of the world’s largest and most responsible energy producers.
Which leaves a lingering question: In a world that has put a premium on energy security, what’s next for Canada?
Heather Exner-Pirot, a senior fellow and director of the natural resources, energy and environment program at the Macdonald-Laurier Institute, said Natural Resources Canada’s major projects inventory “has been in a pretty sharp decline since 2015, which is concerning.”
“It’s not just oil and gas but also mining, also electricity . . . It’s the overall context for investment in Canada,” said Exner-Pirot, who is also a special adviser to the Business Council of Canada.
“When we look at BC, we see TMX, Coastal GasLink, very soon LNG Canada will be finishing up. That’s probably in the order of $100 billion of investment that that province will lose.
“So you do start to think about what happens next. But there are some things on the horizon. I think that’s part of it. Other LNG projects where maybe it wasn’t politically popular, it wasn’t a social license, and maybe the labour force was also constrained, and now is opening opportunities.”
A recent analysis conducted by Exner-Pirot found that between 2015 and 2023, the number of energy and natural resource major projects completed in Canada dropped by 37 per cent. And those that managed to be completed often faced significant delays and cost overruns.
One notable project Exner-Pirot expects to fill the void is Ksi Lisims LNG, which is being developed on the northwest coast of Canada to export low-carbon LNG to markets in Asia. The project represents a unique alliance between the Nisga’a Nation, Rockies LNG and Western LNG.
Ksi Lisims LNG is a proposed floating LNG export facility located on a site owned by the Nisga’a Nation near the community of Gingolx in British Columbia.
The project will have capacity to produce 12 million tonnes of LNG per year, destined for markets in the Pacific basin, primarily in Asia where demand for cleaner fuels to replace coal continues to grow.
Rendering of the proposed Ksi Lisims floating LNG project. Image courtesy Ksi Lisims LNG
As well, the second phase of the LNG Canada export terminal in Kitimat, B.C. shows increasing signs of moving forward, which would roughly double its annual production capacity from 14 million tonnes to 26 million tonnes, Exner-Pirot added.
While nearby, Cedar LNG, the world’s first Indigenous-owned LNG export facility, is closing in on the finish line with all permits in place and early construction underway. When completed, the facility will produce up to three million tonnes of LNG annually, which will be able to reach customers in Asia, and beyond.
According to the International Energy Agency, the world is on track to use more oil in 2024 than last year’s record-setting mark. Demand for both oil and natural gas is projected to see gradual growth through 2050, based on the most likely global scenario.
Kevin Birn, chief analyst for Canadian oil markets at S&P Global, said despite the Trans Mountain expansion increasing Canada’s oil export capacity by 590,000 barrels per day, conversations have already begun around the need for more infrastructure to export oil from western Canada.
“The Trans Mountain pipeline, although it’s critical and adds the single largest uplift in oil capacity in one swoop, we see production continue to grow, which puts pressures on that egress system,” he said.
Photo courtesy Trans Mountain Corporation
Birn said Canada remains a major global player on the supply side, being the world’s fourth-largest producer of oil and fifth-largest producer of natural gas.
“This is a really important period for Canada. These megaprojects, they’re generational. These are a once-in-a-generation kind of thing,” Birn said.
“For Canada’s entire history of being an oil and gas producer, it’s been almost solely reliant on one single export market, which is the United States. That’s been beneficial, but it’s also caused problems for Canada in that reliance from time to time.
“This is the first time Canada will enter the global marketplace as a global player, so it is an incredibly important change for the industry.”
Exner-Pirot said Canada has the ability to become a major exporter on the energy front globally, at a time when demand is accelerating.
“We have open water from B.C. to our allies in Asia . . . It’s a straight line from Canada to its allies. This is a tremendous advantage,” she said, noting the growth of data centres and AI is expected to see demand for reliable energy soar.
“We are seeing growing electricity demand after decades of plateauing because our fridges got more energy efficient and our washers and dryers got more energy efficient. Now we’re starting to see for the first time in a long time more electricity demand even in developed countries. These are all drivers.”
Prince Rupert Port Authority CEO Shaun Stevenson. Photo courtesy Prince Rupert Port Authority
From the Canadian Energy Centre
A strategic gateway to the world
Tucked into the north coast of B.C. is the deepest natural harbour in North America and the port with the shortest travel times to Asia.
With growing capacity for exports including agricultural products, lumber, plastic pellets, propane and butane, it’s no wonder the Port of Prince Rupert often comes up as a potential new global gateway for oil from Alberta, said CEO Shaun Stevenson.
Thanks to its location and natural advantages, the port can efficiently move a wide range of commodities, he said.
That could include oil, if not for the federal tanker ban in northern B.C.’s coastal waters.
The Port of Prince Rupert on the north coast of British Columbia. Photo courtesy Prince Rupert Port Authority
“Notwithstanding the moratorium that was put in place, when you look at the attributes of the Port of Prince Rupert, there’s arguably no safer place in Canada to do it,” Stevenson said.
“I think that speaks to the need to build trust and confidence that it can be done safely, with protection of environmental risks. You can’t talk about the economic opportunity before you address safety and environmental protection.”
Safe Transit at Prince Rupert
About a 16-hour drive from Vancouver, the Port of Prince Rupert’s terminals are one to two sailing days closer to Asia than other West Coast ports.
The entrance to the inner harbour is wider than the length of three Canadian football fields.
The water is 35 metres deep — about the height of a 10-storey building — compared to 22 metres at Los Angeles and 16 metres at Seattle.
Shipmasters spend two hours navigating into the port with local pilot guides, compared to four hours at Vancouver and eight at Seattle.
“We’ve got wide open, very simple shipping lanes. It’s not moving through complex navigational channels into the site,” Stevenson said.
A Port on the Rise
The Prince Rupert Port Authority says it has entered a new era of expansion, strengthening Canada’s economic security.
The port estimates it anchors about $60 billion of Canada’s annual global trade today. Even without adding oil exports, Stevenson said that figure could grow to $100 billion.
“We need better access to the huge and growing Asian market,” said Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute.
“Prince Rupert seems purpose-built for that.”
Roughly $3 billion in new infrastructure is already taking shape, including the $750 million rail-to-container CANXPORT transloading complex for bulk commodities like specialty agricultural products, lumber and plastic pellets.
The Ridley Island Propane Export Terminal, Canada’s first marine propane export terminal, started shipping in May 2019. Photo courtesy AltaGas Ltd.
Canadian Propane Goes Global
A centrepiece of new development is the $1.35-billion Ridley Energy Export Facility — the port’s third propane terminal since 2019.
“Prince Rupert is already emerging as a globally significant gateway for propane exports to Asia,” Exner-Pirot said.
Thanks to shipments from Prince Rupert, Canadian propane – primarily from Alberta – has gone global, no longer confined to U.S. markets.
More than 45 per cent of Canada’s propane exports now reach destinations outside the United States, according to the Canada Energy Regulator.
“Twenty-five per cent of Japan’s propane imports come through Prince Rupert, and just shy of 15 per cent of Korea’s imports. It’s created a lift on every barrel produced in Western Canada,” Stevenson said.
“When we look at natural gas liquids, propane and butane, we think there’s an opportunity for Canada via Prince Rupert becoming the trading benchmark for the Asia-Pacific region.”
That would give Canadian production an enduring competitive advantage when serving key markets in Asia, he said.
Deep Connection to Alberta
The Port of Prince Rupert has been a key export hub for Alberta commodities for more than four decades.
Through the Alberta Heritage Savings Trust Fund, the province invested $134 million — roughly half the total cost — to build the Prince Rupert Grain Terminal, which opened in 1985.
The largest grain terminal on the West Coast, it primarily handles wheat, barley, and canola from the prairies.
The Prince Rupert Grain Terminal. Photo courtesy Prince Rupert Port Authority
Today, the connection to Alberta remains strong.
In 2022, $3.8 billion worth of Alberta exports — mainly propane, agricultural products and wood pulp — were shipped through the Port of Prince Rupert, according to the province’s Ministry of Transportation and Economic Corridors.
In 2024, Alberta awarded a $250,000 grant to the Prince Rupert Port Authority to lead discussions on expanding transportation links with the province’s Industrial Heartland region near Edmonton.
Handling Some of the World’s Biggest Vessels
The Port of Prince Rupert could safely handle oil tankers, including Very Large Crude Carriers (VLCCs), Stevenson said.
“We would have the capacity both in water depth and access and egress to the port that could handle Aframax, Suezmax and even VLCCs,” he said.
“We don’t have terminal capacity to handle oil at this point, but there’s certainly terminal capacities within the port complex that could be either expanded or diversified in their capability.”
Market Access Lessons From TMX
Like propane, Canada’s oil exports have gained traction in Asia, thanks to the expanded Trans Mountain pipeline and the Westridge Marine Terminal near Vancouver — about 1,600 kilometres south of Prince Rupert, where there is no oil tanker ban.
The Trans Mountain expansion project included the largest expansion of ocean oil spill response in Canadian history, doubling capacity of the West Coast Marine Response Corporation.
The K.J. Gardner is the largest-ever spill response vessel in Canada. Photo courtesy Western Canada Marine Response Corporation
The Canada Energy Regulator (CER) reports that Canadian oil exports to Asia more than tripled after the expanded pipeline and terminal went into service in May 2024.
As a result, the price for Canadian oil has gone up.
The gap between Western Canadian Select (WCS) and West Texas Intermediate (WTI) has narrowed to about $12 per barrel this year, compared to $19 per barrel in 2023, according to GLJ Petroleum Consultants.
Each additional dollar earned per barrel adds about $280 million in annual government royalties and tax revenues, according to economist Peter Tertzakian.
The Road Ahead
There are likely several potential sites for a new West Coast oil terminal, Stevenson said.
“A pipeline is going to find its way to tidewater based upon the safest and most efficient route,” he said.
“The terminal part is relatively straightforward, whether it’s in Prince Rupert or somewhere else.”
Under Canada’s Marine Act, the Port of Prince Rupert’s mandate is to enable trade, Stevenson said.
“If Canada’s trade objectives include moving oil off the West Coast, we’re here to enable it, presuming that the project has a mandate,” he said.
“If we see the basis of a project like this, we would ensure that it’s done to the best possible standard.”
Alberta
Emissions Reduction Alberta offering financial boost for the next transformative drilling idea
From the Canadian Energy Centre
$35-million Alberta challenge targets next-gen drilling opportunities
‘All transformative ideas are really eligible’
Forget the old image of a straight vertical oil and gas well.
In Western Canada, engineers now steer wells for kilometres underground with remarkable precision, tapping vast energy resources from a single spot on the surface.
The sector is continually evolving as operators pursue next-generation drilling technologies that lower costs while opening new opportunities and reducing environmental impacts.
But many promising innovations never reach the market because of high development costs and limited opportunities for real-world testing, according to Emissions Reduction Alberta (ERA).
That’s why ERA is launching the Drilling Technology Challenge, which will invest up to $35 million to advance new drilling and subsurface technologies.
“The focus isn’t just on drilling, it’s about building our future economy, helping reduce emissions, creating new industries and making sure we remain a responsible leader in energy development for decades to come,” said ERA CEO Justin Riemer.
And it’s not just about oil and gas. ERA says emerging technologies can unlock new resource opportunities such as geothermal energy, deep geological CO₂ storage and critical minerals extraction.
“Alberta’s wealth comes from our natural resources, most of which are extracted through drilling and other subsurface technologies,” said Gurpreet Lail, CEO of Enserva, which represents energy service companies.
ERA funding for the challenge will range from $250,000 to $8 million per project.
Eligible technologies include advanced drilling systems, downhole tools and sensors; AI-enabled automation and optimization; low-impact rigs and fluids; geothermal and critical mineral drilling applications; and supporting infrastructure like mobile labs and simulation platforms.
“All transformative ideas are really eligible for this call,” Riemer said, noting that AI-based technologies are likely to play a growing role.
“I think what we’re seeing is that the wells of the future are going to be guided by smart sensors and real-time data. You’re going to have a lot of AI-driven controls that help operators make instant decisions and avoid problems.”
Applications for the Drilling Technology Challenge close January 29, 2026.
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