The Port of Vancouver has emerged as a lifeline for Asian oil refiners amid disruption of the vital shipping route through the Strait of Hormuz, according to ATB Cormark Capital Markets.

Tankers calling at the port’s Westridge Marine Terminal now have access to an expanded, reliable supply of oil from Alberta, thanks to the Trans Mountain pipeline. 

Not only do these barrels have clear sailing to Asian ports, analysts say they’re just the type of oil Asian refiners are increasingly looking for. 

About half the oil flowing through the pipeline is considered “heavy,” one of the grades most affected by the Strait of Hormuz closure, ATB said.

“Canadian heavy oil could become a premium global asset,” managing director of institutional equity research Patrick O’Rourke wrote on Mar. 2.

SAGD oil sands project in northern Alberta. Photo courtesy Cenovus Energy

Stability in a volatile market

It’s a sentiment that was building before the new conflict in the Middle East.

“Beyond price, Canada offers something increasingly valuable — a large, stable and reliable supply of heavy crude,” Studio.Energy director of research Carmen Velasquez wrote in November. 

“At a time when geopolitical risk is reshaping energy trade flows…this reliability is becoming a strategic differentiator, not just a commercial one.” 

Why heavy oil matters

Exported mainly from Alberta’s oil sands, heavy oil is one of Canada’s biggest energy assets. 

Thick and gooey, it requires diluent for transportation and complex processing to produce gasoline, jet fuel and petrochemicals used in everyday items.

The large-scale petrochemical refineries in Asia that are driving oil demand growth can pair well with Alberta’s heavy oil, Velasquez said.

“In recent years, [China] has invested heavily in new mega-refineries and upgraded existing ones to handle heavier and more complex crude slates,” she said.

Zhejiang Petrochemical Complex in in Zhejiang, China. Photo courtesy Zhejiang Petroleum and Chemical Co.

Asia’s growing appetite

China is Asia’s “heavy oil hub,” RBC director of energy policy Shaz Merwat wrote in a November research note. 

“China is sharply pivoting into petrochemicals, aiming to take Japanese and Korean market share,” Merwat said. 

“India, too, is expected to see oil imports grow 1.5 million barrels per day by 2035 as both countries seek steady supplies of heavy and sour crude,” he said. 

“Today, that supply originates from the Middle East, Russia and Venezuela, creating an opening for a stable, Western entrant.”

Canadian barrels gaining a foothold

Canadian heavy oil has started building a footprint in Asia thanks to the Trans Mountain expansion and “re-exports” — Western Canadian barrels shipped from terminals on the U.S. Gulf Coast.

Both China and India have purchased Canadian oil from Trans Mountain since the expanded pipeline went into service in May 2024, the company reports.

Courtesy Trans Mountain Corporation

While China leads overseas sales from Trans Mountain, India is a regular buyer of U.S. Gulf Coast re-exports, according to RBN Energy.

Courtesy RBN Energy

Demand keeps climbing

“Besides ongoing efforts to expand the Chinese customer base, India and Southeast Asia are the most promising growth markets for Canadian crude,” Studio.Energy’s Velasquez said. 

“And this is no small opportunity.”

The International Energy Agency projects oil demand in the Asia-Pacific region will rise to 41 million barrels per day by 2050, up from 35 million barrels per day in 2024.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

On frigid winter nights in northern Alberta, the glow from the outdoor hockey rink warms Tyler Letendre’s heart. 

This year more than ever, the lights are bright, the ice is smooth, and the boards are solid — built to last, not patched together year after year like they used to be.

For Letendre, the operations manager and economic development officer for Peerless Trout First Nation (PTFN), the rink is more than a place for friends and families to get together to skate. It’s proof that something fundamental has changed in his community.

“Two years ago, this wouldn’t have been possible,” Letendre says. “Now, it’s something our kids can rely on.”

The transformation didn’t come from a one-time grant or a short-term program. 

It came from equity ownership in energy infrastructure — a model that is quietly reshaping how Indigenous communities build wealth, plan for the future, and assert economic self-determination.

Why ownership matters in remote communities

Photo courtesy Peerless Trout First Nation

Peerless Trout First Nation is a rural, semi-isolated community in northern Alberta. Its two main settlements sit 29 kilometres apart, meaning the Nation must often build and maintain two of everything, from roads to recreation facilities.

“In communities like ours, location matters,” Letendre explains. 

“If you’re near a major city, like Tsuu T’ina or Enoch, business development is easier. If you’re not, it’s very hard to generate own-source revenue.”

For PTFN, oil and gas development in the region created opportunity.

In 2023, the Nation and 11 other communities acquired an 85 per cent stake in $172 million in oil and gas pipeline assets operated by Tamarack Valley Energy in the Clearwater play. The deal was supported by the Alberta Indigenous Opportunities Corporation.

Since closing, the 12 First Nations and Métis communities have secured stable revenue streams that have proven more valuable than traditional impact benefit agreements (IBAs), long central to Indigenous engagement in the energy sector.

Photo courtesy Tamarack Valley Energy

“IBAs fluctuate with oil and gas prices,” Letendre says. “You can’t borrow against them. Banks won’t look at you.”

Equity ownership, by contrast, creates a tangible asset.

“With equity, you have ownership and predictable returns,” he says. “Banks recognize that.”

A ‘significant shift’ in energy development

Indigenous ownership of oil and gas projects has surged in the past five years, according to the Canada Energy Regulator (CER).

The CER reports that since 2021, Indigenous communities have acquired ownership interests in more than 5,000 kilometres of pipelines across the country. 

This is in addition to ownership stakes in four LNG terminals in B.C. and Manitoba at various stages of development. 

Many of the agreements are supported by government loan guarantee programs like the Alberta Indigenous Opportunities Corporation. 

“Overall, the growing role of Indigenous ownership in pipelines and LNG projects in Canada marks a significant shift in how major energy projects in the country are developed, financed, and managed,” the CER said.

Turning revenue into community infrastructure

Over the past two years, PTFN and the other communities have used Clearwater equity revenues to support education initiatives, emergency preparedness, wildfire evacuations and other community priorities without the restrictions that often come with government funding.

“There are no strings attached,” Letendre says. “We decide what our community needs most.”

One of the most visible examples is the Nation’s upgraded outdoor hockey rinks — $1.4-million structures with shells, lighting, boards and higher construction standards.

“These aren’t temporary fixes,” he says. “They’re built to last.”

Letendre says the energy partnership has strengthened and diversified PTFN’s economic base. 

While the community’s locally owned construction company creates much-needed jobs and builds capacity, expansion also brings added risk and expense.

“The equity deal is straight revenue. It did in one year what our construction revenue did in three – more than $500,000 a year – and if the company does well in production, it could be more,” he says.

A pattern repeating across Canada

Peerless Trout’s experience is not unique.

At Willow Lake Métis Nation, ownership of energy infrastructure has been transformative in similar ways. 

After investing in Suncor Energy’s Northern Courier Pipeline, the Nation was able to purchase 205 acres of land near Fort McMurray — its first modern homeland — now known as Sohkastwâwin, a Cree word meaning “resilience.”

Astisiy Limited Partnership, representing eight Indigenous communities, acquired Suncor’s 15 per cent interest in the Northern Courier Pipeline. Photo courtesy Alberta Indigenous Opportunities Corporation

Revenue from that deal has since been used to support housing, cultural programming and the purchase of a campground and RV park that Willow Lake plans to redevelop into an Indigenous tourism destination.

“For us, ownership means stability, being able to plan for the long term and invest in what matters most to each community,” says Justin Bourque, former CEO of the Nation who now leads a consulting firm specializing in negotiation and management of meaningful Indigenous-led industry partnerships. 

“Equity ownership doesn’t replace consultation requirements for energy companies. When you add the two together, it’s a deeper relationship that’s more well-rounded and more engaged.”

That same principle underpins Enbridge’s Project Rocket, a landmark partnership that saw 23 First Nations and Métis communities acquire an ownership stake in seven major pipeline assets in northern Alberta in 2022. 

One of the largest Indigenous equity transactions in North America, the deal has provided about $25 million over the last three years – steady, long-term revenue that communities are using for housing, education, elder supports and economic diversification.

Enbridge’s latest Indigenous partnership saw 38 First Nations acquire 12.5 per cent equity ownership of the company’s Westcoast natural gas pipeline system in British Columbia for approximately $736 million.

Squiala First Nation Chief David Jimmie said the deal will generate sustained economic benefits for the community from an asset that has operated within its traditional territories for more than 65 years. 

“People often ask what economic reconciliation for Indigenous Peoples looks like. This is it,” he said when the partnership was announced last May.

From ‘too good to be true’ to a new normal

Photo courtesy Peerless Trout First Nation/Facebook

For Peerless Trout First Nation, equity ownership has also unlocked the ability to think beyond immediate needs.

The Nation is now in the design phase of a fishing lodge and resort, a project aimed at diversifying the local economy and creating sustainable employment based on the fantastic fishing in the area’s lakes and rivers.

With equity in energy assets under its belt, the community is now able to leverage other financing for business ventures that were previously out of reach.

“At the beginning, it felt too good to be true, but it’s not,” Letendre says.

“Now we’re not just sitting back waiting for opportunities to arrive. We have the experience to be able to go out and approach industry on our own and pursue more partnerships,” he says.

“If we can do 10 more deals like this, it will benefit our people hundreds of times over for generations.”

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

In the heart of Alberta’s oil sands region, a lake sits next to Suncor Energy’s Mildred Lake operation. 

On the surface, it looks like one of the countless natural lakes dotting the boreal forest north of Fort McMurray. But several metres below, it tells a different story. 

Base Mine Lake is not a natural lake—it’s a demonstration pit lake at one of the industry’s oldest mines. 

Once a tailings pond, Base Mine Lake was capped with water in 2012 and is now undergoing reclamation, drawing on decades of innovation to restore the land and water affected by development. 

Base Mine Lake. Photo courtesy Suncor Energy

“Tailings ponds aren’t meant to be a permanent part of our closure landscapes,” said Rodney Guest, Suncor’s senior development advisor, mine water closure. 

“We’re investing significant resources to advance tailings treatment technologies in support of land and aquatic reclamation to meet our commitments.”

Those commitments include fully reclaiming mine sites, including tailings facilities, and returning the land to Albertans and local communities, he said. 

Pit lakes: widely used around the world

Pit lakes are a common mine reclamation and closure practice used worldwide. 

According to the Canadian Association of Petroleum Producers (CAPP), a pit lake is basically any lake formed within a former mine pit. 

Over time, as the site stabilizes, these lakes generally come to look and function much like natural lakes. 

Thousands of examples exist globally, particularly in coal and hard-rock mining operations such as gold and copper, CAPP says.

Helping address oil sands tailings

Even as the oil sands sector has reduced its freshwater use per barrel by nearly one-third since 2013, the total volume of fluid tailings has reached about 1.4 billion cubic metres, reflecting continued production growth. 

Aquatic reclamation techniques like pit lakes are helping address the tailings challenge. 

This is evident in the reduction of “legacy tailings,” or tailings placed in storage before 2015. 

Since 2015, the volume of legacy tailings across Alberta’s oil sands has fallen by 40 per cent, according to Alberta Energy Regulator data. 

Base Mine Lake has contributed to this reduction, which overall is helped by water-capped tailings and permanent aquatic storage structure (PASS) technology.

How water-capped tailings technology works

Oil sands tailings are a mixture of fine clay, water, sand, and residual bitumen left over from the bitumen extraction process. 

Traditionally stored in large ponds, these liquid tailings settle very slowly—a process that can take decades. Water-capped tailings technology provides a more controlled solution.

In this approach, a layer of water is placed over tailings within a mined-out pit, forming a pit lake. 

The water cap isolates the tailings from the surface environment while promoting the development of a natural aquatic ecosystem.

Supported by long-term research

Numerous pit lakes, with and without tailings, are proposed or planned for the oil sands region. 

Each is designed to integrate into the final reclaimed landscape, supporting sustainable water management and creating new habitats for aquatic and terrestrial life.

Long-term research and monitoring at several sites—some dating back to the 1980s—has shown that water-capped tailings can be effective. 

Bacteria quickly break down many compounds within the tailings, while the solids settle naturally within weeks. The water layer above largely prevents tailings sediments from migrating back to the surface.

Base Mine Lake. Photo courtesy Pathways Alliance

Base Mine Lake performance

At Base Mine Lake, for example, a water cap currently between 10 and 13 metres covers the tailings. Ongoing research and monitoring show it’s performing as expected, Guest said.

“The tailings remain contained at the bottom and don’t mix with the water,” he said. 

“Water quality continues to improve, diverse habitats are forming, and typical boreal lake life including insects, invertebrates, plants and mammals are present in and around the demonstration watershed.”

While the lake doesn’t currently discharge to the environment, the long-term plan is for its water to eventually integrate into the regional watershed. 

Prior to release, water will be monitored and tested to ensure it meets regulated water quality guidelines, Guest said. 

In the meantime, Suncor adds fresh water and withdraws water for use in its mine operations. 

PASS technology demonstration

Suncor is implementing permanent aquatic storage structure (PASS) technology at a demonstration site that includes Lake Miwasin, a 10-metre-deep lake with a five-metre water cap. 

PASS uses common treatment agents to help tailings settle and release water more quickly. The process speeds up consolidation and helps improve overall water quality.

The company says early results are promising, showing expected improvements in water quality and the re-establishment of vegetation.

Insights from local Indigenous communities have helped refine techniques, including influencing landform design and identifying culturally important plants and trees.  

Confidence in pit lakes

“Results from Base Mine Lake and Lake Miwasin give us the confidence that pit lakes are a safe and integral component of our planned closure landscape,” Guest said.

The transition to a fully reclaimed boreal landscape in Alberta’s oil sands will take time. 

Most of the reclaimed area will consist of forests and wetlands, with pit lakes expected to account for less than 10 per cent. 

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

*References to land that is reclaimed, permanently reclaimed and surface reclaimed meet the definition of “permanently reclaimed” as defined in the Alberta Energy Regulator Direction for Conservation and Reclamation Submissions (December 2018).