The province's plans for a massive bitumen pipeline to the West Coast have been advancing in recent months, following a series of federal and provincial memorandums of understanding

Premier Danielle Smith remains confident the West Coast pipeline will get a pivotal decision by Oct. 1 from the federal Major Projects Office, one that will determine if the proposal is deemed a development of national importance.

Her government is also putting the finishing touches on a new incentive program that aims to trigger more spending to increase oil and gas output in Alberta — production needed to fill the pipeline.

During a wide-ranging speech to the Calgary Chamber of Commerce on Tuesday, Alberta’s premier discussed the province’s pipeline aspirations and the importance of new federal rules that will accelerate tax incentives on capital spending and could help the proposed pipeline.

“We’re closer than ever to a new oil pipeline carrying more than a million barrels a day to the West Coast and on to a fast track to the growing Asia-Pacific markets,” Smith told the business audience.

“We’re expecting to have an interim decision, sort of conditional approval by Oct. 1st, with final approval by (next) September.”

The province’s plans for a massive bitumen pipeline to the West Coast have been advancing in recent months, following a series of federal and provincial memorandums of understanding.

The mega-project will serve as a key signal to oil producers that they can significantly ramp up output in the coming years without facing egress problems that plagued the sector in the past.

Smith pointed out oil production continues to climb in Alberta and is approaching five million barrels per day (bpd), while the government wants to see output hit eight million by 2035.

Attention is focused on the future of the pipeline, which would extend from Alberta to southern British Columbia, largely following the right-of-way corridor of the existing Trans Mountain pipeline.

The proposed development is estimated to cost between $35.2 billion and $43.7 billion. In July, the province announced it was formally partnering with the federal government’s Trans Mountain Corp. and Pembina Pipeline on the proposal.

The Carney government had previously agreed to pursue the pipeline’s designation as a project of national interest, for approval under the Building Canada Act, by Oct. 1, thereby placing it on a fast track for reviews and a final federal approval.

Asked about the Oct. 1 date, Federal Natural Resources Minister Tim Hodgson said Monday he wouldn’t “front run” the Major Projects Office or the prime minister on the issue.

“There is a clear target that we will do all of the work necessary so that we can hopefully get to a decision by Oct. 1,” Hodgson said in an interview.

“I have every reason to believe they’re working to that deadline, and so I’m looking forward to the next week or so.”

The premier said her main negotiator on the project has indicated the province doesn’t need to “hedge” on meeting that expected timeline.

“At the moment, we’re anticipating a decision by Oct. 1,” Smith said.

There are several other supportive signs for the project.

Last week, the Carney government announced an expanded federal incentive, one that will allow many businesses — including those in the oil and gas sector — to immediately deduct the costs of new investments in capital assets.

A report by CIBC Capital Markets last week said the federal productivity mega deduction, as it’s called, will help improve industry cash flow levels.

“This could, in turn, help drive accelerated capital spending by operators into a forthcoming egress expansion for the basin,” stated the report.

Earlier this week, the federal government unveiled Bill C-39, which will provide for a “one project, one review” assessment process, completed within one year, on initiatives that aren’t designated projects of national significance.

To build the West Coast project, members of the Oil Sands Alliance — including Suncor Energy, Imperial Oil, Canadian Natural Resources and Cenovus Energy — and other producers will also need to increase output to fill the proposed pipeline.

The alliance will also have to move ahead with the Pathways carbon capture network in northern Alberta.

The industry has been seeking accelerated capital cost allowance, and greater incentives from the province, to help spark additional spending on growth projects.

The province has been talking about a new royalty framework, and it’s expected to lead to an announcement in mid-November, Smith indicated.

Addressing the chamber audience, Imperial Oil CEO John Whelan noted both levels of government have taken steps to reduce regulatory timelines for major projects, saying he’s encouraged by the accelerated capital cost allowance measure.

“With a supportive fiscal and regulatory framework, Imperial has the potential to double our gross operated upstream production, while also advancing additional downstream biofuel production,” he said.

“Alberta is a driving force behind Canada’s economy, and as a national company, we believe a united Canada is the strongest position we can take to face the challenges and opportunities ahead.”

It would send an important signal to have the pipeline project designated a development of national importance next month, said Gitane De Silva, the principal of GDStrategic and former CEO of the Canada Energy Regulator.

“That was one of the conditions of the MOU. That was (part) of the deal that if Alberta did a bunch of things, then the federal government would declare it to be in the national interest,”  she said Tuesday.

“So I think there has to be a yes, and it has to be on time.”

Chris Varcoe is a Calgary Herald columnist.

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