With little possibility for additional western and southern pipeline expansion, some in the oil industry as well as economists and commentators are once again looking to the East.

Recently the Montreal Economic Institute, a centre-right think tank, published a piece advocating a rethink of Canada’s pipeline strategy by emphasizing the role of new pipelines, considered the greenest and safest way to transport oil.

The economic case for increasing oil exports from Canada is compelling when viewed in a global context. World oil consumption is expected to grow for a few more decades before eventually diminishing, leaving much of the world reserves stranded and much reduced in value.

There is also the national security case for reducing imports from the US. Recent history has shown that the US, when confronted with an emergency, will typically prefer a national over a North American approach.

However, when viewed from a Quebec standpoint, the case for increased pipeline capacity and oil exports remains largely unsympathetic. In 2014, the Quebec government identified seven conditions for pipeline expansions in Quebec (listed at the link). While it has been only seven years since Quebec clarified its conditions, the position of the Quebec government on this matter has since likely hardened against eastern pipeline expansion.

Quebec’s “Green” Image

The Quebec government is building its economy on the bedrock of renewable electricity and wants to reduce oil consumption in Quebec. Expanding oil pipelines would send the wrong message at a time when Quebec is trying to build a “green” economy.

Environment

There is a broad consensus among Quebec voters regarding the need to protect Quebec’s large water resources, including the St. Lawrence River. The idea of new pipelines crossing waterways and increased tanker traffic is highly unpopular and would be a very difficult political sell for Quebec provincial and federal politicians.

Economic Benefit

The Quebec economy is diversified and doing relatively well. Quebec believes that it has many avenues along which to continue expanding its economy and greater reliance on fossil fuels is not one of them. The muted provincial and regional support afforded to Energy Saguenay’s LNG (liquefied natural gas) export terminal and pipeline project is instructive in this regard.

Disruption

So: short of disruption in the current supply system, the likelihood of Quebec voters accepting oil pipeline expansion over their province is slim.

But disruptions may occur. Enbridge’s Line 5 oil pipeline, which supplies Ontario and Quebec, crosses the Straits of Mackinac in Michigan, connecting Lake Michigan and Lake Huron. Michigan’s governor wants to terminate Enbridge’s right of way for environmental reasons. Enbridge and others are contesting the matter. Should Michigan be successful, Quebec and Ontario would have to find new supply routes. The existing pipelines from the West being full, oil would have to come by rail from the West or imported by ship. This would mean a sharp increase in tanker traffic on the St. Lawrence, as it is unlikely that the unused Portland to Montreal pipeline with a capacity of slightly over 200,000 bpd (barrels per day) could swing back into action as Portland (and other cities), NGOs, and individuals are against any future use of the pipeline, regardless if it is used to bring oil to Quebec or export oil from Canada.