Alberta submitted a proposed southern route for a new West Coast oil pipeline to the federal Major Projects Office on July 2, and Canada has begun the process to consider listing it as a project of national interest under the Building Canada Act. Such a designation would accelerate federal consideration but would not itself authorize construction. Before a decision is made, the Major Projects Office will consult potentially affected Indigenous communities. The federal government plans to give notice by Oct. 1, 2026, if it intends to move forward with listing the project.The pipeline proposed by the Alberta government would carry approximately one million barrels of crude oil a day along a corridor of roughly 1,250 kilometres.The route would largely follow the existing Trans Mountain corridor and would not require any change to the federal Oil Tanker Moratorium Act, which restricts large tankers carrying crude oil from using designated ports along B.C.’s north coast. The precise route has not yet been finalized.Although Alberta and the federal government are emphasizing the project’s potential economic benefits, it faces major financial, environmental and political risks that could determine whether it delivers the returns its backers promise.The promised economic gainsThe West Coast pipeline is linked to a broader federal initiative called Pathways Plus, which combines the pipeline with oilsands production growth and a large carbon capture project.Together, the pipeline, carbon capture project and production growth are projected to create approximately 175,000 new jobs across the country. The carbon capture component, known as the Pathways Project, is separately projected to contribute up to $16.5 billion to Canada’s GDP and $12.2 billion in labour income.The Alberta government also estimates the broader initiative could increase Canada’s real gross domestic product by more than 0.6 per cent annually by the 2040s.Some of the economic benefits could be shared with Indigenous communities through proposed equity purchase rights. Participating communities could earn investment returns and create income streams that could be reinvested in local priorities, although those returns would depend on the project’s financial performance. Similar Indigenous ownership proposals have been developed in connection with the completed Trans Mountain Expansion project. But an opportunity to purchase equity is not the same as Indigenous consent, and communities are likely to hold differing views about the project. Read more: Why a group of First Nations wants to own the Trans Mountain pipeline The pipeline could also help reduce Canada’s dependence on the United States by building stronger trading relationships with Japan, Korea, China and India. This would support Canada’s broader effort to diversify its exports and improve its access to international markets.Are the economics still favourable?Despite these potential benefits, the pipeline faces major economic risk. Large infrastructure projects often see cost overruns and delays because of rising material and labour costs, regulatory challenges and unexpected construction problems. The Trans Mountain Expansion Project faced many hurdles, including difficult geography, regulatory delays, extreme weather and the COVID-19 pandemic. Its estimated cost rose from $5.4 billion in 2013 to approximately $34.2 billion by the time the expansion was completed in 2024.The Alberta government estimates the new West Coast pipeline would cost between $35.2 billion and $43.7 billion if investment is approved within the next three years. The announced ownership group includes one private company, Calgary-based Pembina Pipeline Corporation, and two publicly owned entities, Trans Mountain Corporation and the Alberta Petroleum Marketing Commission.The project is in an early stage, and its final financing structure has not been determined. If additional private investment doesn’t materialize, more of the cost could shift to the public sector, and some of the burden could fall on taxpayers.Climate and environmental risksThe economic case also depends heavily on how long Asian demand for oil remains strong. Some energy forecasts suggest global demand could level off around the time the pipeline enters service, while industry forecasts anticipate continued growth.China’s oil-demand growth has already slowed as renewable energy expands and electric vehicle sales rise. EVs are expected to displace five millions of barrels of global oil demand a day by 2030, although projections vary.Canada’s climate commitments add another source of pressure. The United Nations Framework Convention on Climate Change established emissions goals for member countries, and Canada has committed to net-zero emissions by 2050.However, Canada is not on track to meet any of its climate targets: not the 2026 interim emissions target, the 2030 Paris Agreement commitment or the 2050 net-zero goal.This creates a potential timing problem. The pipeline is expected to be completed between 2032 and 2034, assuming there are no major delays. That could coincide with a period of weaker growth in global oil demand, reducing its expected financial returns. Delays could further diminish profitability by increasing costs while postponing revenue.Environmental concerns also remain. Construction could affect waterways, salmon habitat and other ecosystems along the route. A major pipeline or tanker spill could harm wildlife, waterways and nearby communities, including Indigenous communities whose lands and resources could be affected. These concerns could also lead to regulatory and legal challenges, creating further delays and costs.Political and social oppositionEnvironmental and climate concerns have already contributed to political and Indigenous opposition.Tsawwassen chief administrative officer Kim Baird said consultation has only begun recently, raising concerns about how influential Indigenous voices will be and the regulatory challenges that could follow as a result of opposition. Indigenous perspectives are not uniform. Some communities may view equity participation and employment as economic opportunities, while others may oppose the pipeline because of its potential effects on their territories, waters and rights.The project has also encountered broader social resistance. More than 120 civil society organizations have signed an open letter opposing new fossil fuel pipelines to the West Coast or anywhere in Canada. The coalition includes environmental, legal, health, Indigenous and faith organizations.The timing has drawn further criticism. With hundreds of wildfires burning across the country, environmental groups have pointed to this summer’s fire season as evidence Canada can’t afford to expand fossil fuel infrastructure while also meeting its climate commitments. Read more: How to stay safe from the triple threat of wildfires, smoke and extreme heat Critics have also raised concerns about federal regulatory changes they say could weaken environmental oversight by accelerating the consideration of major projects. Those concerns are likely to intensify as the pipeline moves through consultation and regulatory review.For the project to deliver its promised economic benefits, its backers would need to control costs, attract sufficient private financing, secure lasting demand for Canadian oil and address the rights and concerns of Indigenous communities and other affected groups in Alberta and British Columbia.Whether the pipeline ultimately proves beneficial will depend less on its proponents’ headline projections than on whether those economic, environmental and political conditions can be met.Olivia Freeman, an undergraduate student at the University of Guelph’s Department of Economics and Finance, co-authored this article.Eric Chi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.