The initial deadlines set in the energy and climate agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith are likely to be missed, indicating early hurdles with the deal that involves exploring a new export pipeline from Alberta to the West Coast. Smith acknowledged delays in negotiations during an interview in Houston, Texas, where she is participating in the CERAWeek by S&P Global energy conference.
The memorandum of understanding signed by Carney and Smith in November includes specific deadlines to be met by April 1. Progress has been made on the cooperation agreement on impact assessments, while work on a methane equivalency agreement is underway. However, challenges persist in finalizing deals on the carbon pricing equivalency agreement and collaborating with oilsands companies on the Pathways carbon capture project.
The Pathways project, led by the Oilsands Alliance, aims to achieve net-zero emissions by capturing emissions from 20 oilsands facilities in northern Alberta and storing them underground near Cold Lake. Although the companies involved have not made a final investment decision, negotiations are ongoing to advance the project.
Industry concerns have been raised regarding carbon pricing policies, with the Canadian Association of Petroleum Producers expressing worries about the impact of increased carbon emission costs on competitiveness. Carney’s decision to maintain the industrial carbon tax while cutting the consumer carbon tax has prompted discussions on potential challenges for the industry.
Despite these challenges, Smith remains optimistic about attracting foreign investment in the proposed oil pipeline project. While no private companies have shown interest yet, she believes that foreign companies and sovereign wealth funds will likely be interested in investing in the pipeline, potentially holding a substantial stake.
Foreign investment in Canada’s energy sector is not new, with LNG Canada being cited as an example of successful international partnerships. Smith anticipates interest from various foreign stakeholders, emphasizing the potential for partnerships with companies from Asia, the Middle East, Canada, and the United States.
