As East-West pipeline divide persists, Atlantic Canada’s energy isolation is only getting worse

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“From a national security standpoint, there are questions,” Oberstoetter said. “Would we prefer not to have that dependency?”

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The region’s growing reliance on overseas supply is already visible. A cargo of LNG from Australia — more than 25,000 kilometres away — arrived at the Port of Saint John, N.B., last Thursday.

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Saint John LNG (formerly Canaport) was designed to import and process gas, but it can’t export gas because it lacks liquefaction equipment. Local politicians have suggested converting the equipment so that it could send Western Canadian gas to Europe, but the owner, Repsol SA, said that wouldn’t work because of high pipeline tolls from Alberta to Quebec and the roughly $4-billion cost of a new pipeline.

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Beyond the contracts, the main challenge is geography and economics.

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“The last segments to reach eastern markets are the toughest to build,” Oberstoetter said, citing high tolls, dense populations and regulatory complexity.

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International buyers have shown interest in East Coast export concepts, but he said there has never been any kind of “serious backing with money” to solve the “last pipeline challenge” for projects such as GNL Québec, a proposed LNG export terminal, and Goldboro LNG in Nova Scotia, a planned facility to liquefy and ship natural gas to global markets.

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The industry, he said, has remained “more Western-oriented” in deciding “which projects are rising to the top commercially.”

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Political decisions in Quebec also complicate plans for eastbound pipelines because the border barrier is not just physical, but ideological, Gabriel Giguère, a senior policy analyst at the Montreal Economic Institute, said.

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“The politicians are absolutely disconnected from the population,” he said.

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Giguère points to the Quebec National Assembly’s unanimous vote in 2022 to ban oil and gas exploration, but said polling often shows a more nuanced public view that is open to developing domestic resources.

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He is also skeptical of recent signals from the Parti Québécois that suggest it’s conditionally open to pipeline projects, pointing to a motion last month in which the party voted against a Norwegian LNG proposal from Marinvest Energy AS before the project’s details were fully presented.

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“It’s a weird approach,” he said. “The message is clear: uncertainty will remain under the PQ.”

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A March 2025 study by Giguère estimated that if projects such as Energy East, a proposed pipeline announced in 2013 to carry Western Canadian crude to Eastern refineries and export terminals, and GNL Québec had proceeded, Canada could have redirected nearly 28 per cent of its oil exports and 20 per cent of its natural gas exports to markets other than the U.S.

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In dollar terms, that represents more than $38 billion per year in potential energy exports — including $36.7 billion in oil — reaching international markets, according to the report. The result would be more income and less reliance on a single market.

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New Brunswick Premier Susan Holt is trying to close Atlantic Canada’s energy gap, lobbying Ottawa to designate a $5-billion pipeline extension from Quebec City as a priority nation-building project, though outgoing Quebec Premier François Legault has signalled only cautious openness.

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Giguère said Ottawa’s proposed Building Canada Act (Bill C-5) and Quebec’s own Q-5 acceleration framework could, in theory, create a streamlined approval pathway for national pipelines. Whether that alignment happens, however, depends on the political will in both Quebec City and Ottawa.

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But there are also questions about whether high-cost East Coast Canadian projects would remain competitive if they were built. Europe scrambled to replace Russian gas and decided to rely on U.S. Gulf Coast sources, so some forecasters, including Oberstoetter, are projecting a potential oversupply of LNG in the early 2030s.