Calgary-based oil firm pitches exemption to Canada’s thorny B.C. tanker ban

A Calgary-based oil producer is pitching a new port on the northern British Columbia coast to ship as much as 250,000 barrels a day of crude, a proposal that requires an exemption to a federal tanker ban.

Strathcona Resources Ltd. plans to reach out to Prime Minister Mark Carney’s government as early as next week with a plan to ship crude by rail to a yet-to-be-built oil export terminal in Prince Rupert, B.C., said Adam Waterous, the company’s chairman.

Oil exports off the northern B.C. coast are controversial and opposed by many coastal Indigenous communities, environmental groups and B.C. Premier David Eby. Former Prime Minister Justin Trudeau implemented the moratorium in 2019.

Waterous is pitching the rail plan as a way to accelerate Carney’s goal of increasing crude shipments to customers other than the US, which takes about 90 per cent of Canada’s oil exports. The prime minister is seeking to reduce Canada’s dependence on its southern neighbour after the Trump administration launched a trade war and imposed tariffs on many Canadian exports.

“Why this is quite transformational for the country is we think that we could be shipping a quarter of a million barrels a day in under two years,” he said in an interview. “It accelerates the timeline” for exporting more oil to Asia, he said.

Last year, Carney said he was open to “adjusting” the tanker ban to make room for a planned new million-barrel-a-day oil pipeline running from Alberta to the B.C. coast as part of a memorandum of understanding with Alberta’s government.

“The federal government already crossed the Rubicon of a tanker exemption at Prince Rupert as part of the original MOU,” Waterous said. “I think there is an opportunity to partner with local Indigenous communities to be able to advance the project.”

Carney in July decided to commission the state-owned Trans Mountain Corp. to build the new pipeline to the Vancouver area in southern B.C. and maintain the tanker ban.

That pipeline won’t be operating before the early to mid-2030s. By contrast, Waterous said exports off a new oil terminal in Prince Rupert could start within two years. The volumes of crude shipped off Prince Rupert would amount to a near 50 per cent increase from current Canadian oil shipped off the B.C. coast, all off the Trans Mountain pipeline that runs from Alberta to the Vancouver area.

The oil would include crude produced by Strathcona and other companies for export by tankers to refineries in high-demand Asian countries, he said.

The Canadian oil sands producer already ships as much as 80,000 barrels a day of its own and other companies’ crude south to the US Gulf Coast via rail terminals Strathcona acquired in recent years in Hamlin, Sask., and Hardisty, Alta, Waterous said.

The company has hoped to export oil on the Canadian National Railway system to the B.C. coast since purchasing the terminals.

Waterous said he was proposing the project now in the wake of Alberta voters rejecting the possibility of the province separating.

“There is an opportunity now that the referendum is behind us,” he said.

Prince Rupert already includes much of the infrastructure needed for a crude export terminal since the port receives propane by rail, which is then exported off an existing terminal, he said.

The possible new oil export terminal would be able to receive the world’s largest oil tankers that carry more than a million barrels a day, Waterous said, adding that Indigenous opposition might be overcome through negotiations and partnerships.

“There is much work to be done, a lot of wood to chop, a lot of community engagement to advance,” he said. “The economics could be very compelling.”