The initial deadlines set in the energy and climate agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith are facing delays, indicating early obstacles in the deal that involves the exploration of a new export pipeline from Alberta to the West Coast.
The memorandum of understanding outlines specific deadlines to be met by April 1. However, Smith acknowledged setbacks in negotiations when questioned about the issue by CBC News on Monday at the CERAWeek by S&P Global energy conference in Houston, Texas.
Smith emphasized the importance of not prolonging the delays and expressed the necessity for market certainty within the targeted timeframe.
Overview of the agreement
In November, Carney and Smith signed a memorandum of understanding granting special exemptions to Alberta from federal environmental regulations and extending political backing to a new oil pipeline to the B.C. coast.
The initial set of deadlines within the agreement consists of:
- An agreement on co-operation regarding impact assessments.
- An agreement on methane equivalency.
- An agreement on carbon pricing equivalency.
- A trilateral MOU with the Pathways companies.
While progress has been made on the first agreement, announcements regarding the second agreement are forthcoming, according to Smith. However, negotiations on the industrial carbon tax and collaboration with oilsands companies for the development of the Pathways carbon capture project are proving to be more challenging.
The Oilsands Alliance, a coalition of companies committed to achieving net-zero emissions, has proposed the Pathways project, which aims to capture emissions from 20 oilsands facilities in northern Alberta and transport them 400 kilometers via a pipeline to a terminal near Cold Lake, Alta., for underground storage. The project is planned to be constructed in phases between 2027 and 2040.
The companies involved in the project have not yet made a final decision on investment.
Smith expressed the need for a three-party agreement with the Pathways group, expressing hope for its conclusion in the upcoming weeks.
Concerns from the industry
The delays have arisen following industry concerns over industrial carbon pricing policies. Carney, in one of his initial actions as prime minister, eliminated the consumer carbon tax but retained the industrial carbon tax.
In January, the Canadian Association of Petroleum Producers issued an open letter arguing that increased costs for carbon emissions could harm the country’s competitiveness, especially when the U.S. is actively leveraging various tools to achieve energy and geopolitical objectives.
The agreement between Smith and Carney from the previous year entails rolling back some federal environmental regulations.
Natural Resources Minister Tim Hodgson affirmed the federal government’s commitment to the agreement with Alberta to foster growth in the energy sector during a speech on Monday.
“Both Canada and Alberta are aligned in the belief that we must facilitate the expansion of natural resource production and transportation in Western Canada to deliver energy resources to our allies, in collaboration with Indigenous communities and industry,” stated Hodgson at the opening of the Canadian pavilion at the CERAWeek by S&P Global energy conference.
Smith’s confidence in foreign investment
The Alberta government is actively developing a proposal for the new oil