Alberta is considering a sweeping overhaul of how natural gas pipelines are planned and built in the province, as internal government analysis warns that rising demand from data centres, oilsands production, and other industries could overwhelm planned pipeline capacity within the next decade.
The proposals, contained in what appears to be a leaked cabinet document obtained by The Hub, include legislative changes intended to increase competition, new powers to direct utilities to build critical infrastructure, and the potential creation of Crown entities that could plan—and, if necessary, build or backstop—natural gas infrastructure when private companies decline to do so.
The 46-page document also reveals a much broader—and more complicated—story.
It describes Alberta as increasingly “captive to internal forecasting and investment decisions of private infrastructure owners.” It lays out the government’s frustrations with TC Energy, disagreement within its own ranks over how far to intervene, and potentially significant legal and financial risks.
Ultimately, the document asks who decides when and where Alberta builds the infrastructure needed to fuel its future growth.
The main details were first reported Friday by The Narwhal, which revealed that the province was considering extensive intervention in the natural gas market.
The Hub had published a podcast interview with Alberta Technology and Innovation Minister Nate Glubish just a day before The Narwhal story appeared, without knowledge of the cabinet report. Nevertheless, the episode had raised a closely related concern, after The Hub heard from industry that large new customers can face wait times of several years for new connections to the main natural gas pipeline network.
At the centre of the issue is the NGTL system, a sprawling network of more than 24,000 kilometres of pipelines operated by TC Energy that moves natural gas across Alberta and northeastern British Columbia.
During the interview, Glubish was asked whether Alberta risked solving one infrastructure problem—finding enough electricity for data centres—only to create another by straining the natural gas system needed to drive new power generation.
“This is something that we’ve seen as something that needs some time and attention,” Glubish said.
He said the province was working with natural gas companies to increase production and expand pipeline infrastructure, describing it as part of the “heavy lifting ahead of time” needed to ensure every part of the supply chain could “scale in parallel” without creating another bottleneck.
The Hub also received a copy of the cabinet report soon after. It purports to be prepared by Alberta’s Ministry of Energy and Minerals for Energy Minister Brian Jean.
The Hub sent questions to several departments and government staffers about the report and its recommendations, and offered elected officials an opportunity to respond to its findings.
In response, the energy minister’s office cautioned that the proposals in question should not be interpreted as actual policy.
“Governments routinely examine a wide range of policy, regulatory, and legislative options when considering complex issues, and internal materials do not represent government decisions,” a representative from Jean’s office wrote in an email.
“An increasing number of project proponents across a variety of industries have raised concerns about accessing industrial quantities of natural gas in several regions of Alberta. We are working with industry, including the natural gas infrastructure owners, to better understand these issues and identify practical solutions that support future growth and investment.”
The Hub has also sent multiple requests to TC Energy seeking its response to the report’s characterization of the company, its assessment of Alberta’s future natural gas demand and pipeline capacity, and the government’s account of negotiations between the two sides.
TC Energy, which has previously advertised with The Hub, has not responded to request for comment by publication time.
A pipeline system struggling to keep pace
The cabinet report now provides a much more detailed picture of the problem the government was grappling with behind the scenes.
Despite Alberta’s abundance of natural gas, the report says the infrastructure needed to move it around is struggling to keep up. Officials identify three main problems: insufficient pipeline capacity, a lack of competition among companies that build and operate the stuff, and the fact that the province has limited control over the federally regulated NGTL system.
The stakes, according to the report, extend well beyond data centres.
Natural gas is needed to generate electricity and heat, but also to support oilsands development, petrochemical manufacturing, critical minerals processing, and other industries.
Alberta’s gas system also connects producers to markets elsewhere in Canada, the U.S., and LNG exports overseas.
Alberta Premier Danielle Smith answers questions during a news conference regarding a new indigenous energy project with TC Energy in Calgary, Alta., Tuesday, July 30, 2024. Todd Korol/The Canadian Press.
The report says NGTL is “fully subscribed until 2029 with no future capacity confirmed beyond 2030,” while the timeline for connecting additional customers remains uncertain. More significantly, it suggests Alberta’s demand could substantially exceed the additional capacity contemplated in TC Energy’s own growth plan.
Part of the disagreement appears to come down to how future demand is counted.
TC Energy generally builds infrastructure around demand it considers sufficiently firm, according to the report. Alberta, meanwhile, is anticipating significant new demand from projects that may not yet meet that threshold, including data centres.
“TC Energy has indicated it does not build on speculative demand,” the report says.
The document argues the consequences are already broader than lost projects. It says inadequate infrastructure is suppressing Alberta natural gas prices, reducing government royalties, and restricting industrial investment.
Years of talks with TC Energy
The province did not immediately arrive at the more interventionist options now contemplated in the report.
According to the document, Alberta began discussions with TC Energy in 2024 over natural gas access, with talks eventually escalating to meetings involving Premier Danielle Smith and TC Energy executives. But officials concluded the solutions put forward by the company were not sufficient to guarantee timely access to gas across the province.
One proposal put forward by TC Energy in early 2025 involved a relatively narrow solution in the Grande Prairie region, including a short pipeline and potentially a gas-fired power plant. The report says the project would have required government backing while providing TC Energy with a higher rate of return than it earns on NGTL.
By June of this year, TC Energy had supposedly presented the province with a broader action plan. But the report says much of it depended on a new investment framework that would provide the company with higher returns on future investment, while potentially shifting more financial risk to the Alberta government.
That proposal has encountered resistance from NGTL customers. Negotiations remain unresolved, with TC Energy setting a Nov. 1 deadline to reach a settlement.
The dispute appears to have pushed Alberta to consider alternatives.
Power transmission lines and wind turbines near Pincher Creek, Alta., June 6, 2024. Jeff McIntosh/The Canadian Press.
The report says ATCO has expressed a willingness to invest in new infrastructure at lower returns, but that its NGTL-connected assets remain subject to TC Energy’s forecasting decisions.
By the time the cabinet document was prepared, officials appeared increasingly pessimistic that negotiations alone would solve the problem.
“Given the extensive discussions with TC Energy since 2024 that have produced no viable solutions to date, and the time-sensitive opportunities available to Alberta, escalatory and direct measures are now required,” the report says.
Those measures could fundamentally change how natural gas infrastructure gets built in Alberta.
Who gets to build the pipelines?
The solutions contemplated in the report go considerably further than trying to persuade TC Energy to invest more.
The first step would be to change Alberta’s Gas Utilities Act to prohibit restrictions on competition contained in private agreements and other anti-competitive arrangements. Regulators would also be required to consider competition when reviewing pipeline projects and commercial agreements.
The province could also give cabinet and the Alberta Utilities Commission explicit authority to designate some infrastructure as critical and direct gas utilities to construct or expand pipelines when additional capacity is deemed necessary for Alberta’s broader public interest.
But perhaps the most significant proposal is what would happen if private companies still declined to build.
The recommended approach contemplates two Crown corporations.
One would act as a system-wide planner, identifying where additional natural gas infrastructure is needed—a function the report says does not currently exist at the provincial level.
The other would be a commercial developer. It could construct, own, or financially backstop projects identified by the planner when existing utilities decide not to invest.
Separating the two appears to be deliberate. The report says combining the planning and commercial functions could create a conflict of interest for any single office.
TC Energy headquarters in Calgary, Alta., Tuesday, July 30, 2024. Todd Korol/The Canadian Press.
There is, however, a significant catch.
Because the proposed provincial planner would be limited to pipelines within Alberta, the report acknowledges it would be “unlikely to influence the NGTL’s capacity buildout and operations.” And data centres expected to come online between now and 2028 would still likely have to rely on existing infrastructure.
That means some of the most sweeping solutions contemplated by the government may do little to resolve the immediate bottleneck that helped prompt them.
Dissent within government
The proposed intervention did not appear to have unanimous support within the Alberta government.
The Ministry of Technology and Innovation, which is leading the province’s push to attract data centres, supported the recommended approach. But the Ministry of Jobs, Economy, Trade and Immigration did not, warning that more aggressive government intervention could undermine investor confidence.
Other departments were more neutral or cautious, flagging the potential for legal and financial liabilities.
Treasury Board and Finance warned of potentially significant capital exposure and contingent liabilities if Alberta ultimately became responsible for backing or building pipelines. The preliminary estimates contemplate tens of millions of dollars annually to operate the proposed Crown entities, on top of legal, regulatory, and consulting costs. The cost of actually supporting major projects would come later and would require further cabinet approval.
There are legal risks as well. The report warns that changes interfering with existing arrangements between TC Energy and ATCO could trigger litigation and potentially claims for compensation.
The report then loops back to a fundamental jurisdictional constraint. NGTL is federally regulated, meaning Alberta cannot simply dictate how the system expands or how its tolls are set.
Finally, intervention could have unintended consequences for customers.
The document raises the possibility of additional or “stacked” pipeline tolls and warns that forcing utilities to make investments they otherwise would not could increase the returns they demand to compensate for the additional risk—costs that could ultimately be passed on to consumers.
Nevertheless, the report argues that doing nothing carries its own risks, too.
Alberta’s growing reliance on natural gas for electricity means disruptions to the pipeline system could affect not only industrial development but grid reliability. It notes that the current framework does not require natural gas to be prioritized for power generation during critical events such as extreme cold.
Why Alberta wants more gas demand
A rendering of Meta’s $13-billion Sturgeon Data Centre north of Edmonton. Credit: Meta.
The pipeline problem did not emerge in isolation.
Long before the current rush to build AI data centres, the government had been examining the consequences of chronically weak natural gas prices.
That concern featured prominently in a separate government review released last year.
The Mature Asset Strategy, which was published in April 2025 and led by oilpatch veteran David Yager, examined what to do about hundreds of thousands of aging oil and gas wells that are becoming increasingly difficult to operate economically.
One of the solutions identified in that report was remarkably relevant to the problem Alberta is grappling with now.
“Given the current surplus of natural gas in North America, the most compelling opportunity is to add value to natural gas by utilizing more of it within Alberta, particularly by converting it into electricity,” the document says.
The strategy argued that higher natural gas prices could improve the economics of mature assets and benefit smaller producers, municipalities, and landowners.
It specifically singled out AI data centres.
“A promising new sector for Alberta is Artificial Intelligence Data Centers (AIDC), which require substantial electricity but face fewer transportation hurdles than traditional industries,” the strategy says. “Alberta’s low gas prices and abundant supply have attracted interest from AIDC operators.”
The idea has since become part of the government’s public case for attracting data centres.
In a recent video explaining her strategy, Premier Smith described data centres as a way to transform Alberta natural gas into a higher-value product.
“Gas becomes electricity. Electricity becomes computing power. And computing power becomes intelligence,” Smith said.
“As more of these new AI data centres come online, they will generate billions of dollars in additional taxes and royalties for needed public services, and help preserve our low-tax Alberta advantage.”
The Hub will publish responses from TC Energy and the province if and when they are received.
Alberta is contemplating significant changes to its natural gas pipeline planning and construction in response to rising demand from various industries. A leaked cabinet document outlines proposals for increased competition, new powers for utilities, and the potential creation of Crown entities to manage infrastructure development. The document supposedly shows that government is frustrated with TC Energy’s limited capacity expansion and is exploring interventionist options amid concerns about future gas demand. The document highlights the need for timely infrastructure to support Alberta’s economic growth, particularly as the province seeks to attract data centers and other industries reliant on natural gas.
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Comments (6)
This is potentially a very important story, and Falice Chin has done a valuable job bringing it into public view.
But there is an unavoidable evidentiary problem. The Hub states that it received a copy of the 46-page cabinet report. Until the underlying document—or a suitably redacted version of it—is made publicly available, readers are being asked to assess extraordinarily consequential claims without being able to examine the primary source for themselves.
Could The Hub publish the report, provide a redacted copy, or at least disclose its formal title, date, authorship, distribution markings and other identifying details that would allow researchers and the public to locate or request it independently?
The distinction matters. There is a very large difference between policy options considered by officials, recommendations placed before cabinet, and decisions actually adopted by government.
The reporting has lit an important fire. Publishing the source document would allow the rest of us to determine whether we are looking at smoke, flame, or merely another excursion into Canadian “secret squirrel” policymaking.
Until then, fascinating as the story is, independent verification remains impossible.