Trump’s economic warfare and threats of annexation have triggered a rare moment of political agreement in Canada. We desperately need to reduce our economic dependence on the United States, our leaders concur, and every option is suddenly on the table.

In the rush to disentangle the Canadian economy from Trump-led America, one idea has captured the public and political consciousness: building a new pipeline to carry crude oil from Alberta to Atlantic Canada where it could be refined and exported overseas.

On the face of it, it makes a lot of sense. Why wouldn’t we try to reduce dependence on the U.S. for our biggest export commodity? And, in a moment where nation-building projects are on the menu, why wouldn’t governments take the lead?

Putting aside the idea’s origins in the fossil fuel lobby, building an east-west oil pipeline—whether reviving the proposed Energy East project or starting something entirely new—is a deeply flawed and ultimately counterproductive idea, especially when better options are on the table.

Energy East failed on its own terms—and the business case is weaker than ever

First of all, even if a new pipeline were viable, it would come online far too late to help with the current crisis. It took 11 years to complete the Trans-Mountain pipeline expansion (TMX) from the time it was first proposed, and that was a relatively “easy” project that involved twinning an existing oil pipeline. The Keystone pipeline took 12 years to complete. Building a pipeline is an enormous logistical and regulatory undertaking. And any attempt to convert or build more than 4,500 km of pipe through the Canadian shield can be expected to take well over a decade.

More importantly, the economic case for an east-west oil pipeline is weak. The oil industry gave up on Energy East back in 2017 for a number of good reasons, including the price tag. When it was abandoned, the project was expected to cost $15.7 billion. Given the federal government’s experience with TMX, which ballooned from a $4.5 billion initial investment to a final cost of over $34 billion—plus billions more in shady loans—it’s not unreasonable to expect that a revived Energy East would ultimately carry a much higher price tag as well. It’s hard to know before construction begins, but a final bill of $50 billion or more is in the realm of possibility.

In that context, it’s unsurprising that there are currently no major private sector proponents for the project. Coming up with capital on that scale would almost certainly require a major public investment. But even if the federal government itself championed the project, enormous political barriers remain. An east-west pipeline would pass through a half dozen provinces and cross the territories of 180 First Nations, many of which never consented to the initial Energy East proposal. That’s a lot of jurisdictions who will be asked to accept the risks that come with pipelines without sharing in any direct benefits.

The other, more existential reason the project has lost its private-sector backers is that an east-west pipeline may never make money even if it somehow got built. It surprises many people to learn that global oil demand is plateauing, according to the International Energy Agency, and demand in advanced economies, including most of North America and Europe, is already falling. Yet governments around the world continue to invest in new oil production. The inevitable result? A looming oversupply crisis that will drive down oil prices significantly and, the IEA warns, put much of the global fossil fuel industry at risk in the coming decades.

The inconvenient truth for oil-dependent economies, such as Canada’s, is that the world is moving away from fossil fuels—not quickly enough to meet the threat of climate change, but still quickly enough to endanger the long-term economics of the oil industry.

In other words, a new east-west pipeline is neither a short-term nor a long-term solution for Canada. It would take too long to build to help with the current crisis of U.S. economic dependence. And, by the time it came online, it would be competing for a shrinking Atlantic market in a falling price environment. That’s a boondoggle waiting to happen—with tens of billions of public dollars potentially on the line.

Unfortunately, there is no easy, short-term solution to the current, Trump-imposed crisis. We should be especially wary of politicians using the crisis to advance an agenda of deregulation as if eroding social and environmental protections will somehow make the Canadian economy more resilient. Instead, governments must step in with immediate support for workers and communities affected by Trump’s economic warfare while pursuing a longer-term economic pivot.

A real nation-building project

The good news is that the sudden patriotic impulse to build out an east-west energy system is on the right track. Instead of a pipeline, however, the long-term nation-building project we need at this moment is an east-west electricity grid.

Clean electricity is perhaps Canada’s greatest strategic asset in the 21st century. Already, more than 80 per cent of electricity generated in the country is non-emitting. As more and more of the economy electrifies—everything from electric vehicles to heat pumps to steel furnaces—we will need to double or even triple total electricity production, which Canada is well-positioned to do given our existing infrastructure, expertise and geography.

Besides the obvious climate benefits, accelerating the electrification of the economy will reduce Canada’s dependence on volatile fossil fuel prices and, in particular, Canada’s dependence on the U.S. energy market. As an especially cheap source of electricity, getting more renewables on the grid also lowers costs for households and businesses while attracting investment in electricity-intensive industries such as manufacturing and technology.

Clean electricity is a path forward for reconciliation with Indigenous Peoples, who are the second largest owners of renewable energy assets in the country after utilities. Unlike oil and gas pipelines that run through Indigenous territory and, at best, offer financial compensation for the ever-present environmental and health risks, Indigenous-owned electricity projects empower communities and create lasting economic benefits, such as the option to sell excess power back to the grid.

Unlocking all of these benefits on a national scale won’t be possible without new transmission infrastructure to carry electricity around the country. Few electricity lines run east-west in Canada, which makes it difficult to move excess clean power—especially where it is generated using low-cost, intermittent sources such as solar and wind—to the places where it is needed.

Building out interprovincial electricity infrastructure would come with a price tag similar to or lower than the Energy East pipeline—on the order of $24 billion, according to modelling by the David Suzuki Foundation. Both would create thousands of construction jobs along their routes. And both would ultimately reduce our dependence on the U.S. Yet only one would set up the Canadian economy for long-term independence and prosperity.

We can take heart from the European example. After Russia’s invasion of Ukraine, the EU made a concerted effort to diversify away from Russian gas and accelerate the adoption of clean energy alternatives. Three years later and European fossil fuel consumption is well below its pre-crisis peak.

In this pivotal moment, the nation-building project Canada needs is not another oil pipeline that traps us in a costly, declining industry, but an east-west electricity grid that enables a productive, resilient economy for the century to come.