Alberta and Ottawa havesigned a sweeping new energy accord that both sides say will position Canada as a global energy superpower while still working toward net-zero emissions.
The deal includes a pledge for a new bitumen pipeline to the West Coast with Indigenous co-ownership and the suspension of clean electricity regulations for Alberta with the proviso that the province increase its industrial carbon price.
The memorandum of understanding also says the federal government won’t implement its oil and gas emissions cap and, if the pipeline comes to fruition, the government would adjust the current oil tanker ban so bitumen could be exported to Asian markets.
Some Liberal MPs question sustainability of Alberta energy deal touted by Carney
The deal, which Prime Minister Mark Carney and Alberta Premier Danielle Smith signed Thursday, adds that the two sides will consult with British Columbia.
“Canada and Alberta agree to engage with British Columbia immediately in a trilateral discussion on the pipeline project, and during the potential development and construction of the bitumen pipeline referred to in this MOU, and to further the economic interests of B.C. related to their own projects of interest that involve the Province of Alberta including interties,” the MOU says.
“In addition, Canada will work with B.C. on other projects of national interest in their jurisdiction.”
The new pipeline could carry one million barrels a day and would be in addition to projects Trans MountainCorp.is pursuing to boost capacity on the system.
While B.C. supports expanding capacity on the Trans Mountain pipeline, Premier David Eby has said he’s not in favour of a new pipeline to his province’s coast – nor the idea the oil tanker ban could be lifted to support it.
He has also expressed frustration over not being at the table while Mr. Carney and Ms. Smith’s governments were hammering out the deal.
The MOU commits to working with oil sands companies to strike a deal by April on implementing the Pathways project, which focuses on carbon capture and storage, solvent-based replacements or other things that could reduce emissions intensity.
That agreement will include enforcement mechanisms to ensure those projects are built.
The fact the MOU commits Alberta to increasing its industrial carbon price marks a reversal for the province. In May, Ms. Smith froze the price at $95 per tonne,even though it was supposed to be increased to $110 per tonne in 2026 to align with federal pricing.
Now, both levels of government are committing to a new industrial carbon pricing agreement by April 1 that will see Alberta’s price ramp up to $130 per tonne.
The clean electricity regulations will be suspended in the meantime and, once a new industrial pricing agreement is reached, will be lifted entirely for Alberta.
The MOU also commits both sides to a methane equivalency agreement by April, with a 2035 target date and a 75-per-cent reduction target relative to 2014 methane emission levels.
In a news release, Ms. Smith called the MOU her province’s opportunity to take the first steps toward being a global energy superpower and prove that resource development and sustainability can co-exist.
“There is much hard work ahead of us, but today is a new starting point for nation building as we increase our energy production for the benefit of millions and forge a new relationship between Alberta and the federal government,” she said.
Which Indigenous communities would be interested or able to co-own a bitumen pipeline is unclear.
Government officials who briefed reporters on the technical aspects of the deal earlier Thursday said that had yet to be decided.
support any lifting of the oil tanker ban.
Haida Hereditary Chief Guujaaw has said there is nothing that could make the risks worth it.
“What they’re talking about is doubling production in the tar sands, the most toxic muck hole in the world. Why would anybody consider that?” he said. “And is global warming over? Is it all of a sudden okay to start increasing production again?”
The words climate and environment do not appear anywhere in the MOU, but it does commit both sides to achieving net-zero greenhouse gas emissions by 2050.
The agreement is likely to inflame tensions inside Mr. Carney’s caucus. MPs have already been raising concerns internally that the agreement amounts to the Liberals turning their backs on the fight to combat climate change. Many MPs said Wednesday they were waiting to see the full text of the agreement before providing a public reaction.
Among the projects referenced in the MOU is the construction of thousands of megawatts of artificial intelligence computing power.
Alberta is already eyeing AI data centres as a potential economic boon for the province and wants to draw in $100-billion of investment in the sector over the next five years.
With a report from Andrea Woo in Vancouver
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