Strengthening Canada’s Energy Exports from Coast to Coast: How Canada’s Oil & LNG Infrastructure Can Mitigate Hyperinflation Risks

1. Introduction

In an era of significant global uncertainty — where overlapping threats such as geopolitical conflict, climate-driven resource pressures, and even the “Great Filter” [1^11] loom large — Canada’s vast oil and natural gas resources can offer a powerful buffer against economic upheaval. Notwithstanding concerns ranging from environmental stewardship to Indigenous rights, the strategic expansion of coast-to-coast pipelines and liquefied natural gas (LNG) export facilities is increasingly relevant.

This article examines how renewed emphasis on Canada’s hydrocarbon export infrastructure could play a partial yet vital role in mitigating severe economic disruptions, including hyperinflation scenarios. While it cannot solve hyperinflation alone — a phenomenon typically rooted in monetary and fiscal policy failures — robust energy exports can improve trade balances, bolster foreign currency reserves, and strengthen overall economic resilience.

2. Hyperinflation: Causes, Consequences, and Canada’s Position

2.1 Understanding Hyperinflation

Hyperinflation — commonly characterized by monthly inflation rates exceeding 50% [2^22] — arises from a confluence of factors, most notably:

Excessive money printing to finance large deficits [3^33].
Rapid loss of confidence in the national currency.
Severe supply shocks or destruction of productive capacity.

Classic historical examples (e.g., Weimar Germany in the 1920s, Zimbabwe in the 2000s, and Venezuela in the 2010s) demonstrate how quickly normal economic activity deteriorates when prices skyrocket on a daily or weekly basis. In such contexts, hard assets — including commodities like oil and natural gas — often become anchors of real value.

2.2 Canada’s Vulnerabilities and Strengths

Canada has traditionally enjoyed relative currency stability, supported by strong institutions (e.g., the Bank of Canada) and a diversified economy. However, in a global inflationary or hyper-inflationary episode, external shocks — such as precipitous changes in energy demand, geopolitical conflicts, conflict driven supply shocks and interruption to oil and natural gas global supply chain system, or a collapse in global investor confidence — could erode that stability [4^44].

In such a crisis, countries with scalable natural resource exports can partially offset currency pressures by:

Earning stable foreign exchange (e.g., USD, EUR).
Attracting international investment in energy projects.
Maintaining a positive trade balance, which can bolster the currency and signal market confidence.

3. The Case for Coast-to-Coast Pipeline & LNG Expansion

3.1 Historical Context: Major Cancelled or Suspended Energy Projects (2015 – 2025)

Canada has seen numerous large-scale oil, natural gas, and LNG proposals cancelled, shelved, or indefinitely deferred over the past decade. While market volatility and regulatory complexity have often driven these outcomes, the sheer scale of cumulative capital placed on hold underscores the importance of establishing robust, long-term export infrastructures.

Below is a concise list of notable cancelled or suspended projects from 2015 – 2025, grouped by region and project type. Cost figures are approximate, reflecting publicly released estimates that can vary based on project scope, currency conversion, or inclusion of upstream components.

Northern Gateway Pipeline Proponent: Enbridge Location/Route: From Bruderheim, Alberta, to Kitimat, British Columbia Estimated Capital: ~CAD 7.9 billion Status: Cancelled (November 2016)
Energy East Pipeline Proponent: TC Energy (formerly TransCanada) Location/Route: From Hardisty, Alberta, to Saint John, New Brunswick Estimated Capital: ~CAD 15.7–16 billion Status: Cancelled (October 2017)
Keystone XL Pipeline Proponent: TC Energy (formerly TransCanada) Location/Route: From Hardisty, Alberta, to Steele City, Nebraska Estimated Capital: ~CAD 8 billion Status: Terminated (June 2021)

British Columbia – LNG Proposals

Pacific NorthWest LNG (Petronas): Location: Lelu Island near Prince Rupert, BC Estimated Capital: CAD 11 – 36 billion Status: Cancelled (July 2017)
Aurora LNG (Nexen, INPEX, Sinopec) Location: Digby Island, near Prince Rupert, BC Estimated Capital: Up to CAD 28 billion Status: Cancelled (September 2017)
Prince Rupert LNG (BG Group → Shell) Location: Prince Rupert, BC Estimated Capital: ~CAD 11 billion Status: Shelved / application withdrawn
Grassy Point LNG (Various Asian partners) Location: North of Prince Rupert, BC Estimated Capital: ~CAD 10 billion Status: Stalled / never advanced to full regulatory approval
WCC LNG (Imperial Oil & ExxonMobil) Location: Tuck Inlet, near Prince Rupert, BC Estimated Capital: Up to CAD 25 billion Status: Cancelled (application withdrawn)
Kitimat LNG (Chevron/Woodside) Location: Bish Cove near Kitimat, BC Estimated Capital: CAD 15 – 20 billion Status: Indefinite hold
Kwispaa LNG (Steelhead LNG, Huu-ay-aht First Nations) Location: Port Alberni, Vancouver Island, BC Estimated Capital: ~CAD 10 billion Status: Effectively cancelled (~2020)

Note: Ksi Lisims LNG (Nisg̱a’a Nation, Rockies LNG, Western LNG) is still under feasibility and thus not included as cancelled.

Alberta – Oil Sands & Pipelines

Frontier Oil Sands Mine (Teck Resources) Estimated Capital: ~CAD 20.6 billion Status: Cancelled (Teck withdrew application in 2020)
Aspen Oil Sands (Imperial Oil) Estimated Capital: ~CAD 2.6 billion (Phase 1) Status: Deferred/“on hold” since 2019
Dunkirk SAGD Project Estimated Capital: ~CAD 2.4 billion Status: Suspended
Muskwa SAGD Project Estimated Capital: ~CAD 0.8 billion Status: Shelved / cancelled
Carmon Creek Project (Shell) Estimated Capital: ~CAD 3 billion Status: Cancelled in 2015
Keystone XL Pipeline (TC Energy) Estimated Capital: ~CAD 8 billion Status: Terminated mid-2021
Pierre River Mine (Shell) Estimated Capital: ~CAD 10+ billion Status: Suspended in 2015; application withdrawn (2017)

Additional suspended projects include Joslyn North (TotalEnergies), initially paused in 2014, then fully exited ~2018; ~CAD 11 billion cost.

New Brunswick

Frederick Brook Shale Estimated Capital: ~CAD 0.07 billion (exploration) Status: Suspended by 2016 due to provincial moratorium on fracking

Québec

Énergie Saguenay (GNL Québec) Estimated Capital: ~CAD 9–14 billion Status: Denied provincial environmental approval in 2021; cancelled by mid-2022

Northwest Territories – Alberta Corridor

Mackenzie Valley Gas Pipeline Estimated Capital: ~CAD 16.2 billion Status: Officially cancelled after decades of planning

Cross-Province Pipelines

Energy East Pipeline (TC Energy) Estimated Capital: ~CAD 15.7 – 16 billion Status: Cancelled (October 2017)
Northern Gateway Pipeline (Enbridge) Estimated Capital: ~CAD 7.9 billion Status: Cancelled (November 2016)

East Coast LNG (Nova Scotia)

Goldboro LNG (Pieridae Energy) Estimated Capital: ~CAD 10 billion Status: Officially postponed (2021)
Bear Head LNG (LNG Limited) Estimated Capital: ~CAD 2–5 billion Status: Not formally cancelled, but effectively stalled

Capital Impact

CONSERVATIVE estimates suggest that over CAD 150 – 250+ billion in potential energy investments have been shelved or cancelled since 2015. While not all of these ventures would have materialized fully, their cumulative scope underscores the substantial role hydrocarbon exports could have played in Canada’s trade balances and foreign exchange earnings. This underscores the argument that diversifying and improving Canada’s export infrastructure remains strategically significant for economic stability and resilience.

3.2 Additional Cancellations: Proposed Oil Refineries and Smaller LNG Export Terminals (2015–2025)

In addition to the large-scale oil sands and LNG mega-projects noted previously, Canada also saw several smaller- to mid-scale oil refinery and LNG export proposals cancelled or indefinitely stalled during the 2015 – 2025 period. While many of these projects were in conceptual or early development stages, their combined capital estimates still highlight the significant breadth of unrealized investment in the country’s energy infrastructure.

Cancelled or Deferred Oil Refineries

Kitimat Clean Refinery Proponent: David Black (private consortium) Location: Near Kitimat, British Columbia Estimated Capital: CAD 22–30 billion Status: Proposed around 2012–2013, never advanced to formal regulatory or financing stages; effectively cancelled by 2017–2019.
Pacific Future Energy Refinery Proponent: Pacific Future Energy Corp. Location: Northwest BC (near Prince Rupert/Terrace) Estimated Capital: CAD 10–15 billion Status: Proposed in 2014 as a “near net-zero” bitumen refinery; no final investment decision was ever reached. Dormant since ~2018.

Refinery Subtotal: ~CAD 32–45 billion in cancelled or indefinitely deferred projects.

Cancelled or Deferred Small-Scale LNG Terminals

Douglas Channel LNG Proponent: BC LNG Export Co-operative (various backers) Location: Douglas Channel near Kitimat, BC Estimated Capital: ~CAD 0.5–1 billion Status: Multiple attempts at revival (2012–2017) failed; project cancelled with no updates post-2018.
Malahat LNG (Steelhead LNG) Proponent: Steelhead LNG (also behind Kwispaa LNG) Location: Saanich Inlet, Vancouver Island, BC Estimated Capital: ~CAD 1–2 billion Status: Proposed in 2015; faced local opposition and regulatory hurdles. Steelhead’s collapse around 2020 ended the project.

Small-Scale LNG Subtotal: ~CAD 1.5–3 billion in cancelled or indefinitely deferred projects.

Combined Capital Range

Refineries: ~CAD 32–45 billion
Small-Scale LNG: ~CAD 1.5–3 billion

Overall additional cancellations: ~CAD 33.5–48 billion

Implications and Observations

Underdeveloped Downstream Capacity: Canada’s reliance on existing refineries has persisted partly because new large-scale refining projects struggle with high costs, stringent regulations, and uncertain market returns.
Local LNG Ambitions: Smaller LNG initiatives aimed at niche markets or floating LNG solutions were similarly hampered by low global LNG prices (especially during 2015–2017) and a complex regulatory environment.
Aggregate Impact: While modest relative to mega-projects like Pacific NorthWest LNG or Energy East, these refineries and smaller terminals underscore the broader pattern of lost or deferred investment in Canadian energy infrastructure.

Overall, these additional cancellations — when viewed alongside the larger pipeline and LNG projects — reveal a combined wave of unrealized resource-sector expenditures exceeding CAD 30–50 billion from refineries and smaller LNG alone, further illustrating the challenges facing Canada’s hydrocarbon export ambitions.

3.3. Estimating a High-End Total: Summary

Group the Projects by Category Major Cross-Province Pipelines (e.g., Northern Gateway, Energy East, Keystone XL). Large BC LNG Proposals (e.g., Pacific NorthWest LNG, Aurora LNG, Prince Rupert LNG). Alberta Oil Sands Projects (e.g., Frontier Mine, Aspen SAGD, Joslyn North). Other Regional Megaprojects (e.g., Énergie Saguenay in Quebec, Mackenzie Valley Pipeline). Proposed Oil Refineries (e.g., Kitimat Clean, Pacific Future Energy). Smaller LNG Terminals (e.g., Douglas Channel LNG, Malahat LNG).
Use Publicly Stated “High-End” Costs Many project cost ranges are broad (e.g., “$11–$36 billion”). Assume the upper bound to reflect Canada’s history of budget overruns in large infrastructure ventures.
Avoid Double-Counting Some projects, like Keystone XL, appear in multiple lists (pipelines and oil sands). Only include them once.
Sum Each Category’s Upper Bound Major Pipelines alone approach $30–$35 billion. Large BC LNG proposals, taken at high-end estimates, can exceed $140 billion collectively. Alberta Oil Sands projects add another $50 billion or more. Other Regions (Quebec, NWT, Nova Scotia, New Brunswick) total roughly $45 billion. Refineries (Kitimat Clean, Pacific Future) top $40–$45 billion. Smaller LNG proposals add about $3 billion. When combined, these totals approach $315 billion.
Factor in Potential Cost Overruns Canadian mega-projects often exceed their original budgets by 10 – 30%. Even a 10% overrun on $315 billion pushes the total near $350 billion.
Why the Big Difference from Earlier “$150 – $250 Billion” Ranges? Earlier estimates often used average or midpoint cost figures. Some proposals were discounted because they never reached serious financing or final investment decisions. This high-end approach reflects the maximum possible foregone investment if every project had been fully built at its top-range estimate.
Key Conclusion A $300 – $350 billion figure underscores the immense scale of unrealized hydrocarbon-export capacity in Canada. Even if only half these projects had been built (with typical cost overruns), the combined investment would still far exceed $150 billion. Policymakers weighing the economic resilience benefits of oil and gas infrastructure — even as a hedge against severe inflation — should keep in mind the magnitude of these deferred or cancelled projects

3.4 Implications for Economic Turbulence

Currency and Trade Balance: Losing these large-scale export opportunities can weaken Canada’s ability to earn foreign exchange, a key factor in shoring up currency stability during inflationary or hyper-inflationary crises.
Employment and Investment: Delayed or cancelled projects forego thousands of potential jobs, local business growth, and broader economic multipliers — particularly relevant in times of volatility.
Geopolitical Leverage: Having robust, coast-to-coast pipelines and LNG capacity provides flexibility to pivot exports to different global markets, potentially insulating Canada from geopolitical supply shocks.

In sum, this extensive wave of cancelled or suspended projects highlights the tension between environmental/political constraints and market-driven resource development. As discussed in prior sections, neither building nor canceling such infrastructure alone can “solve” the structural causes of hyperinflation — but the ability to export commodities rapidly and at scale can offer a stabilizing counterbalance in an era of macroeconomic uncertainty.

Yet, from a long-term strategic standpoint, reducing Canada’s reliance on one primary export route (largely through the United States) by diversifying export infrastructure to both the Atlantic and Pacific coasts is economically prudent.

3.5 Economic Rationale in a High-Inflation World

3.5.1 Foreign Exchange Earnings

When oil and gas prices spike — often driven by global inflation or geopolitical tensions — nations capable of quickly ramping up exports stand to gain disproportionate revenues [6^66]. These additional earnings, typically in U.S. dollars or euros, can be directed to bolster Canada’s foreign exchange reserves, thereby:

Stabilizing the Canadian dollar against speculative attacks.
Enhancing investor confidence, as strong foreign reserves often correlate with lower country risk premiums.

3.5.2 Trade Balance & Fiscal Space

A more favourable trade balance (i.e., more exports relative to imports) can dampen inflationary pressures and improve fiscal space by generating higher tax revenues from profitable resource extraction. This additional fiscal space, if managed responsibly, may help the federal government address deficits without resorting to excessive monetary expansion [7^77].

3.5.3 Investment & Job Creation

Infrastructure projects such as pipelines and LNG terminals:

Create thousands of direct and indirect jobs (in engineering, construction, and operation).
Attract substantial capital investment, both domestic and international.

In a prolonged inflationary or hyper-inflationary environment, new real-asset investments can act as economic stabilizers, offering employment opportunities that strengthen local consumer purchasing power.

4. Environmental and Indigenous Considerations

4.1 Environmental Stewardship

Critics of expanded hydrocarbon exports emphasize the urgency of the climate crisis and the need to shift toward renewable energy [8^88]. Regulatory processes in Canada require thorough environmental impact assessments (EIAs), advanced spill-prevention technologies, and continuous monitoring along pipeline routes.

A balanced approach recognizes that while long-term de-carbonization is imperative, short- to medium-term expansions in responsibly managed oil and gas exports can:

Support global energy security, especially during transitional periods of supply volatility.
Generate revenues that can be invested in clean-energy R&D and modernizing Canada’s energy grid.

4.2 Indigenous Partnerships

Meaningful engagement with Indigenous communities is paramount for any new pipeline or LNG project to proceed ethically and sustainably [9^99]. Increasingly, Indigenous-led or Indigenous-partnered energy projects are emerging, which can provide:

Economic self-determination for Indigenous nations via equity stakes and long-term revenue sharing.
Protective oversight of environmental and cultural resources, leveraging traditional ecological knowledge.

5. The Limitations of Energy Exports as a Hyperinflation Panacea

5.1 Hyper-inflation’s Primary Drivers

Even significant increases in oil and gas exports cannot single-handedly overcome monetary policy mismanagement, excessive debt, or political crises [2,3^2],[32,3]. While robust resource exports can mitigate inflationary pressures, they do not address the underlying cause of hyperinflation: a spiralling cycle of currency devaluation and loss of public trust in the monetary system. (especially in age of precious metals and cryptocurrency resets)

5.2 Long Project Timelines

Major pipeline and LNG export terminals take years to plan, secure regulatory approval, construct, and commission. Should a hyperinflation crisis erupt suddenly, infrastructure that is not yet operational will be of limited immediate help.

5.3 Market Volatility & Price Risks

Global energy markets are inherently volatile. High nominal oil prices may coincide with broader economic instability, and if demand collapses in a global recession, even well-built export capacity might yield less-than-expected revenue.

6. Policy Recommendations

Revitalize Key East-West Pipeline Projects: Revisit the Energy East concept or similar proposals for transporting Western Canadian crude to Atlantic refineries and export terminals. Engage with stakeholders (provinces, municipalities, Indigenous nations) from the earliest stages to streamline consultations and regulatory processes.
Accelerate LNG Export Terminals: Support and expedite the development of coastal LNG facilities on both coasts (e.g., British Columbia, Nova Scotia). Offer fiscal incentives for private sector investment in Canada’s LNG infrastructure, prioritizing low-emission facility designs (e.g., electrification, carbon capture).
Strengthen Environmental & Indigenous Frameworks: Mandate best-available spill prevention and monitoring technologies to reduce ecological risks. Ensure Indigenous equity participation, job training, and revenue-sharing agreements become standard practice.
Build a Sovereign Energy Fund: Channel a portion of resource-export revenues into a sovereign wealth fund, as practised in Norway [10^1010]. Invest returns in diversifying the domestic economy, stabilizing budgets during bust cycles, and funding R&D for clean-energy transitions.
Coordinate Monetary-Fiscal Policy: Keep resource-driven currency inflows from fuelling an overvalued Canadian dollar (the so-called “Dutch Disease” [11^1111]. Improve coordination between the Bank of Canada and the Ministry of Finance to prevent inflationary overshoots, maintaining credibility in times of global uncertainty.

7. Conclusion

In a future shaped by potential “dystopian” alignments — ranging from climate disruptions and resource wars to hyper-inflationary shocks — Canadian policymakers can no longer afford to leave major oil and gas export projects in limbo. While energy infrastructure expansions are not a magic bullet for hyper-inflation’s deeper monetary roots, they remain one of the most practical strategic buffers against severe economic instability.

By reinforcing pipelines and LNG export terminals from Alberta to both coasts, Canada stands to:

Bolster its foreign exchange reserves,
Strengthen its trade balance,
Drive investment and job creation, and
Better navigate global volatility, including extreme inflationary risks.

Harnessing Canada’s immense energy potential — responsibly and in partnership with Indigenous communities — can provide an economic lifeline in turbulent times. This balanced approach merges short- to medium-term energy development with long-term innovation and environmental responsibility, aiming to secure prosperity for future generations of Canadians.

References

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Reinhart, C., & Rogoff, K. (2009). This Time Is Different: Eight Centuries of Financial Folly. Princeton University Press.
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Skills Gap Trainer. (2025). Strengthening Canada’s Energy Exports from Coast to Coast: An Academic Perspective on Mitigating Economic Turbulence, Including Hyperinflation Risks. [Unpublished Policy Paper].

Disclaimer: The information in this paper draws on publicly available research and theoretical economic frameworks. It does not constitute official investment, financial, or legal advice. Policymakers should consult a wide range of experts, including Indigenous communities and environmental scientists, to form a balanced and responsible approach to expanding Canada’s energy infrastructure.