Canada's hopes of securing an outlet for its landlocked oil wealth and pulling an end run around the eternally deadlocked Keystone XL project took a big step forward Thursday with the release of formal plans to build a U.S. $11 billion pipeline to the Atlantic.

TransCanada, the biggest Canadian pipeline company, submitted its application to Canadian energy regulators for a nearly 3,000-mile-long, million-barrel-a-day pipe running from oil-rich western Canada to refineries and shipping terminals in the east. The so-called Energy East Pipeline Project, which TransCanada officials hope could be in operation as soon as 2018, would provide an export outlet for huge volumes of current and future oil production that right now has no easy way to get to market.

The project wouldn't replace the Keystone XL pipeline -- Canada's other high-profile, multibillion-dollar oil-transport project, which has been awaiting U.S. approval for years -- but it could give Republican critics of U.S. President Barack Obama's administration fresh fodder ahead of the midterm elections. Republicans have long argued that the White House's refusal to sign off on the Keystone project would cost the United States tens of thousands of jobs. The Obama administration has finished reviewing the environmental merits of Keystone, but pushed back any decision until later this year or early 2015.

If the new Canadian route gets approved in 2016 by Canada's National Energy Board, as TransCanada expects, it would give the eastern provinces a source of domestic oil -- removing the need for some 700,000 barrels a day of oil imports -- and would give producers in Alberta and Saskatchewan a direct route to big refineries that could turn the sludgy tar sands into valuable products such as diesel, gasoline, and jet fuel.

That is a potentially big deal for Canada's oil producers out west. With no easy route to market, their oil sells at a discount to other crudes traded in London and New York. So far in 2014, Canadian oil has traded at about $80 a barrel, compared with an average of $100 for U.S. oil blends (which themselves carry a discount compared with the global Brent benchmark traded in London). In other words, without a direct route to market, Canada's oil wealth will remain less than it appears -- and lousy economics could even imperil future production plans.

"It's definitely good news for producers. This will give them access to the U.S. East Coast, the U.S. Gulf Coast, Europe, even India," said Afolabi Ogunnaike, a North American crude markets analyst at Wood Mackenzie, the energy consultancy.

Of course, Canada's pipeline progress won't spell good news for everybody. Removing the need for eastern Canada's oil imports and adding a potential flood of new oil into the market will just add more supply to a global oil market that is already bloated and apparently oversupplied. Coming right as the United States appears increasingly serious about opening the door to its own crude-oil exports, TransCanada's new pipe could mean yet another headache for petrostates like Venezuela, Russia, and Iran that are already reeling from lower oil prices.

And make no mistake: The all-Canadian project owes plenty to the United States, both good and bad.

The bad, of course, is the seemingly endless delay in U.S. approval for the Keystone XL pipeline, a project that would connect Canada's oil patch to the massive and state-of-the-art refineries on the U.S. Gulf Coast. The project was first broached six years ago and, despite getting an environmental green light from the U.S. State Department (which has the final word, since the pipeline crosses an international border), has been a political hot potato for the entirety of Obama's presidency.

Democrats deride the project as a giveaway to energy companies that could have massive and unforeseen environmental costs, particularly in the case of a spill; others fear the pipeline would simply encourage greater development of Canada's tar sands, the extraction of which emits more greenhouse gas emissions than extraction of regular crude.

U.S. Secretary of State John Kerry said this week after meeting his Canadian counterpart that he hopes to have a decision on Keystone soon. Without Keystone, the only way to ship Canadian crude to market is on rail cars, a method that's more expensive and more dangerous.

By shipping oil to eastern Canada, it can be refined there or loaded onto tankers and sent directly to those big U.S. refineries, which are optimized to deal with the kind of heavy crude that comes out of Canada's tar-sands fields. TransCanada chief executive Russ Girling speaks of the Energy East Pipeline Project as a way to do an "end run" around the Keystone quagmire, even if it will add a little bit to transportation costs.

But he also said the Energy East Pipeline won't replace Keystone. "We'll wait as long as necessary," he told the Wall Street Journal this week. On Thursday, Oct. 30, Girling again bemoaned the delays to Keystone, which he said "don't make sense to us."

He said TransCanada expects fewer regulatory hurdles to the new pipeline in Canada. The company has spent more than a year meeting with local communities, indigenous leaders, environmentalists, and labor leaders. In addition, much of it will rely on already-existing infrastructure.

Wood Mackenzie's Ogunnaike said the process should be smoother than in the United States, if perhaps a bit slower than TransCanada expects. This pipeline "is going to cross most of Canada, so they need to address concerns of stakeholders," he said.

There is a more positive development in the U.S. energy industry that helps make the Energy East project look more viable: the boom in U.S. natural gas production, which has made the United States essentially self-sufficient with the resource. Because Canada no longer needs to export natural gas to the United States, it has loads of spare capacity on gas pipelines that used to feed the U.S. market.

TransCanada plans to convert nearly 2,000 miles of the existing, but underused, Canadian Mainline gas pipeline so that it can carry crude instead. It will then build almost 1,000 miles of new oil pipeline to link up with destinations in Quebec and New Brunswick, including one of the largest oil refineries in North America, which is a key source of supply for the northeastern United States.

TransCanada's Girling said Thursday that the new pipeline project would be a way to "right size" Canada's energy infrastructure for "the current realities of the North American market."

In the long term, building a west-to-east pipeline should be of vital importance to ensuring the viability of Canada's oil patch. With Keystone stalled, another option has long been to ship oil to the Pacific coast. But that has run into swarms of opposition from local politicians, environmentalists, and indigenous groups. While Canadian regulators have conditionally approved the "Northern Gateway" pipeline, it remains very vulnerable politically.

Linking Alberta and Saskatchewan's oil fields to the global market is important because the lack of a direct export route means Canadian crude is heavily discounted, which dampens enthusiasm for major oil-development projects out west. Big oil firms such as Statoil, Shell, and Total have canceled tar-sands projects recently because of soft oil prices and uncertainty over how they'd get the product to market.

This summer, Canada's oil industry association slightly reduced its forecasts for long-term oil production, including both conventional crude and the more expensive, complicated stuff dredged out of tar-like sands. That's because projects are getting more expensive. The group now expects Canadian tar sands to produce about 4.8 million barrels a day by 2030, compared with expectations made last year of 5.2 million barrels a day. An outlet to the sea could help turn that around.