OTTAWA — Emissions reductions from a new agreement to build a large-scale carbon-capture project for the oilsands would be offset by the expected greenhouse gas pollution linked to the promised major pipeline through British Columbia, provincial documents show, as Alberta strives to double its production of oil over the next decade.
The federal government, Alberta and a group of oil companies unveiled a new “memorandum of understanding” on Monday that outlines an agreement to build the Pathways carbon capture project. Prime Minister Mark Carney has repeatedly said the Pathways project is required for the federal government’s support of the new oil pipeline Alberta wants built along the existing route of the Trans Mountain pipeline system from outside Edmonton to B.C.‘s Lower Mainland.
The new agreement says a group of energy companies in the “Oil Sands Alliance” intend to build the long-discussed Pathways carbon-capture project, and that this will reduce their greenhouse gas emissions by six megatonnes by 2035, with “shared transportation and storage infrastructure” expected to be operating by the start of 2032.
The federal government said Monday that the agreement includes a “common goal” between Ottawa, Alberta and the “Oil Sands Alliance” to expand carbon-capture projects to add another five megatonnes of reductions by 2040, and five again by 2045, for a total goal of 16 megatonnes by 2045.
Those reductions would be outpaced by the impact of the new pipeline, however, since Alberta government documents estimate the yearly emissions associated with increased oil extraction because of the pipeline could jump between 17.1 and 18.2 megatonnes in 2032, and range between 15.6 and 16.6 megatonnes by 2041.
Alberta, meanwhile, says it wants to double oil production by 2035. According to Canada’s most recent tally of national greenhouse gas emissions, about 13 per cent of Canada’s greenhouse gas pollution in 2024 came from the “oil sands and thermal heavy oil production,” up 177 per cent since 2005 because of significant production increases.
The province estimates the new pipeline, carrying one million barrels of oil per day for export from the B.C. coast, could add billions to the national economy and government coffers, add 140,000 jobs during construction and bring better prices for Canadian oil.
The deal on carbon capture follows the Carney government’s dismantling of several national climate policies implemented when Justin Trudeau was prime minister. Those include the decision last fall to cancel a planned emissions cap for the oil and gas industry — the largest-emitting sector in Canada — as well as scrapping the national consumer carbon price and watering down the long-term increase in the national industrial carbon price that impacts fossil fuel production and other heavy industries.
Last year, after linking federal support for the pipeline to the Pathways project, the then-head of a government climate advisory body accused Carney of misleading Canadians by suggesting it would carry “decarbonized” oil.
Rick Smith, president of the Canadian Climate Institute, an independent think tank, noted Monday that earlier versions of the Pathways project envisioned higher emissions reductions. Still, he said, the time has come for the sector to “put its money where its mouth is” and get the project built.
Much of the Pathways project is also slated to be publicly financed, with federal “investment tax credits” covering 50 per cent of what businesses spend on carbon capture equipment and 37.5 per cent of what’s spent on linked transport and equipment, and plans to extend these payouts for businesses that use carbon capture for “enhanced oil recovery” — a method to inject emissions underground to squeeze out more fossil fuels.
Along with further carbon-capture tax breaks from the Alberta government, the oilsands companies can also face a lighter industrial carbon price in the province if they meet their commitments for emissions reductions through the Pathways carbon capture project, the agreement says.
The new pipeline is also poised to receive public money, with Ottawa and Edmonton planning to take a 90 per cent stake in the project’s construction that is projected to cost between $35.2 billion and $43.7 billion.
Canada pledged through the 2015 international Paris Agreement to slash national emissions to 40 per cent below 2005 levels by 2030 and 45 per cent below 2005 levels by 2035. The Carney Liberals, however, have stressed the longer-term goal of “net-zero” emissions by 2050, meaning technological and natural carbon capture would offset all remaining emissions.
Smith, whose organization has cast doubt on whether Canada can meet its climate targets, said Monday that even the 2050 goal is now in doubt.
“It’s now clear that Canada would need to add significant new policies to the table to even be in the ballpark,” he said.
