From AI data centres to aviation, Alberta is experiencing a diverse wave of growth.

But great growth necessitates great planning. Without careful attention to the accompanying energy infrastructure necessary to support this expansion, Alberta risks bottlenecking its own potential. Which leads to today’s Twenty-Four topic: the Yellowhead Pipeline Project.

For readers unfamiliar with the project, the proposed $2.8 billion Yellowhead Pipeline is a 230-km natural gas transmission pipeline from the Peers region in west-central Alberta to Fort Saskatchewan.

Expected to be operational by the fourth quarter of 2027, the pipeline will have a capacity of over one billion cubic feet per day (Bcf/d). ATCO Energy Systems estimates that building the pipeline will support around 2,000 jobs during construction and enable over $20 billion in downstream investment.

The project’s purpose is straightforward: add capacity to Alberta’s natural gas system and address the growing need for reliable energy. As of August 2025, the project has completed the first of two major regulatory steps required by the Alberta Utilities Commission.

While that answers what the Yellowhead pipeline is, it’s time to dig into what “problem” this project is attempting to solve. 

It comes down to the growing demand for natural gas, especially for generating electricity. As we’ve noted before, the amount of electricity being requested for various projects far surpasses the current capacity of Alberta’s grid. The Alberta Electric System Operator’s (AESO)  connection request dashboard reports 265 projects requesting grid connection, totaling around 24.1 gigawatts (GW), more than the province’s grid capacity of 23.2 GW. Much of the interest is tied to AI data centres, which require massive amounts of reliable power. This translates into a need for more natural gas and reliable transmission to fuel electricity production.

The story doesn’t stop at digital infrastructure. As seen in our most recent outlook, there are several major projects proposed or underway that rely on secure, high-volume natural gas supply to operate reliably. Most notably, Dow’s Path2Zero (currently paused), Air Product’s net-zero hydrogen complex, and multiple carbon capture projects. Without added pipeline capacity, these developments could find themselves competing for limited supply and unable to achieve their goals.

The Yellowhead Project also speaks to Alberta’s ongoing natural gas price volatility. AECO, the province’s natural gas price benchmark, often trades at a discount to the United States’ benchmark, Henry Hub. Yellowhead potentially provides some upside in this regard with additional capacity alongside LNG soaking up supply and ramping up exports.

Alberta’s growth potential is real. But without projects to expand Alberta’s energy infrastructure, such as Yellowhead, the risk of bottlenecks are just as real.

Answer to the previous trivia question: Originally located on the campus of the University of Alberta in Edmonton, CKUA Radio began broadcasting in 1927 and was the first public broadcaster in Canada.

Today’s trivia question: Who is the Yellowhead Pass named after?