The initial set of deadlines outlined in the energy and climate agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith are likely to be missed, indicating early hurdles in the deal aimed at advancing a new export pipeline from Alberta to the West Coast.
The agreement, detailed in a memorandum of understanding, set specific target dates to be achieved by April 1. However, Smith acknowledged delays in negotiations when questioned by CBC News during her attendance at CERAWeek by S&P Global in Houston, Texas.
Regarding the setbacks, Smith emphasized the importance of maintaining market certainty despite the challenges faced in meeting the established timeline.
The agreement in focus
In November, Carney and Smith signed a memorandum of understanding that grants Alberta special exemptions from federal environmental regulations and extends political backing for a new oil pipeline to the B.C. coast.
The initial deadlines in the agreement encompass:
- An accord on impact assessments cooperation.
- An agreement on methane equivalency.
- An agreement on carbon pricing equivalency.
- A trilateral memorandum of understanding with the Pathways companies.
While progress has been made on the first agreement and an announcement regarding the second is imminent, challenges persist in finalizing deals related to the industrial carbon tax and collaborating with oilsands companies on the Pathways carbon capture initiative.
The Oilsands Alliance, comprising companies committed to achieving net-zero emissions, is driving the Pathways project, designed to capture emissions from 20 oilsands facilities in northern Alberta and transport them via pipeline to a terminal near Cold Lake, Alta., for underground storage. The project is planned for phased construction between 2027 and 2040.
Despite ongoing discussions, the companies involved in the project have not yet made a definitive investment decision.
Smith highlighted the need to reach a comprehensive agreement with the Pathways group swiftly, expressing optimism about concluding discussions in the coming weeks.
Industry apprehensions
The delays in meeting the deadlines have been compounded by industry concerns over industrial carbon pricing policies. (Upon assuming office, Carney decided to eliminate the consumer carbon tax but retained the industrial carbon tax.)
In January, the Canadian Association of Petroleum Producers issued a public statement cautioning that heightened costs related to carbon emissions could undermine the country’s competitiveness, particularly amid the U.S.’s strategic deployment of various tools to achieve energy and geopolitical objectives.
The agreement reached by Smith and Carney last year involves rolling back certain federal environmental regulations.
Natural Resources Minister Tim Hodgson affirmed the federal government’s commitment to the agreement with Alberta during a speech on Monday, emphasizing the shared goal of expanding the energy sector.
“Both Canada and Alberta are aligned in the belief that unlocking and expanding natural resource production and transportation in Western Canada is crucial to facilitating the delivery of energy resources to our allies, in collaboration with Indigenous groups and industry,” Hodgson stated while inaugurating the Canadian pavilion at the CERAWeek by S&P Global energy conference.
