Immediately after Venezuelan President Nicolás Maduro was apprehended by United States President Trump, the Globe and Mail editorial board quickly pivoted from condemning the action to promoting a new bitumen pipeline to the BC coast as the number one strategic objective for Canada. On Parliament Hill, Conservative leader Pierre Poilievre was even more strident, calling on Prime Minister Carney to “approve a pipeline immediately” and his governing Liberals to “stop blocking Canadian energy development.”
Canadians are right to feel shocked about Venezuela and what it means for Canada’s future. But we should seriously question the wisdom of further doubling down on oil and gas through a new pipeline. This is just another example of Canadian elites opportunistically using a crisis to push an agenda they already held.
President Trump was candid that Maduro’s arrest was about oil and only tangentially related to drugs or democracy. Some in Canada are concerned that a revitalization of Venezuelan heavy crude exports to the U.S. will undermine Canadian exports.
While the situation in Venezuela is rapidly evolving, there is no imminent danger to Canada’s energy sector. Even if everything went “smoothly”—defined as no insurrection in Venezuela and a compliant government efficiently doing the U.S. government’s bidding—it will be many years before Venezuela’s oil production could be increased in a significant manner.
To get there, U.S. corporations would need to pony up hundreds of billions of dollars to upgrade Venezuela’s infrastructure to bring those reserves to market. The outlook for oil demand a decade or more into the future is highly uncertain with many anticipating declining demand in the face of advancing cleaner technologies.
Any incremental production would go to U.S. refineries in the Gulf Coast, not the Midwest (near Chicago) where specialized refineries are already locked in to processing Canada’s heavy crude via pipeline. In 2025, 61 per cent of Canadian crude oil exports went to the Midwest compared to 14 per cent to the Gulf Coast, plus 17 per cent to other U.S. destinations and nine per cent outside the United States.
Back in Canada, the notion that there is some legal or regulatory mechanism blocking energy development is incorrect. While many in Alberta blame former Prime Minister Justin Trudeau for his relatively modest actions to reduce Canada’s greenhouse gas emissions, his government also oversaw a major increase in oil and gas production.
For crude oil, production rose 34 per cent between 2015, when Trudeau was elected, to 2024, prior to his resignation. As Figure 1 shows, if anything, there is a slight acceleration from 2016 onwards. The only setback in 2020 was due to COVID-19 shutdowns, not federal climate policy. Gas production also jumped 21 per cent (not shown) over the same time period. At the end of June 2025, the new LNG Canada facility started shipping from Kitimat, BC.
Poilievre also seems to have forgotten the Trans Mountain Pipeline Expansion, the bitumen pipeline that opened up in May 2024 and that cost the federal government $34 billion to build. The Trans Mountain system is still running at less than full capacity and additional capacity could be added, although a few more billion would need to be invested.
Because the tolls for oil shippers using Trans Mountain were set well before construction costs ballooned, the resulting revenue is not sufficient to recoup costs, amounting to an ongoing subsidy to the industry. Tom Gunton at Simon Fraser University estimates that “Canadian taxpayers could end up subsidizing oil shipments by between CAD 8.7 billion and CAD 18.8 billion, or up to CAD 1,255 per household, over the life of the project.”
Which brings us to the push for a new bitumen pipeline to the BC coast. The hold up is not Ottawa, which provided lavish gifts to the oil and gas industry in 2025. The Alberta-Canada MOU alone cleared away most of the Trudeau-era climate policy, including a proposed oil and gas cap, clean electricity regulations, anti-greenwashing legislation, and delayed implementation of regulations on methane for five years.
The problem is that there is no private sector proponent for this new pipeline, likely to cost anywhere from $30 to 50 billion. Oil and gas corporations putting down massive sums of money need to be sure they will get an adequate return on their investment. Other much-hyped projects such as new LNG export terminals on the BC coast are similarly awaiting final investment decisions from companies.
If Canada “must build” a new bitumen pipeline to the BC coast, the pressure will fall on the federal and Alberta governments to pay for some or all of the cost, and over the strong objections of the BC government and First Nations. The November 2025 Alberta-Canada MOU envisions First Nations as investors in the pipeline, but this would likely entail borrowing money from the federal government.
In the bigger picture, the push for a new pipeline is building for the previous century, not the 21st century. Sadly, Canadian elites have abandoned climate action and green industrial strategy—even after a horrible wildfire season last summer, and new flooding events in BC.
Over the past couple decades, Canada has reverted to being an exporter of “staples” with a big emphasis on oil and gas (Figure 2). The Trump administration is further encouraging this shift with its tariffs on automobile, steel and aluminum exports.
Canadian politicians have used this moment to push even more mining and oil and gas projects as the country’s primary response. The federal government and Prime Minister Carney need to hold the line by not providing more public subsidies to the oil and gas industry.
Instead, Canada needs to develop a comprehensive economic strategy that adds value to our resources through advanced manufacturing and technology, and rises to the challenge of the unfolding climate emergency.
