Prime Minister Mark Carney and Alberta Premier Danielle Smith have reached a preliminary agreement on a memorandum of understanding that would grant Alberta certain exemptions from federal environmental regulations and pledge support for a new oil pipeline to the B.C. coast, as per sources familiar with the matter. The official announcement is scheduled to take place during a joint press conference in Calgary on Thursday.
The agreement is contingent on Alberta adopting a more stringent industrial carbon pricing system and making a substantial investment in carbon capture technology through the Pathways Alliance, a group of oilsands companies. While details of the MOU have been shared with various sources, they are not authorized to speak publicly until the official release.
This landmark deal is anticipated to improve the strained relationship between the federal and provincial governments, with an extensive public relations campaign expected to accompany the announcement. It is likely to include exemptions for Alberta from federal greenhouse gas regulations, particularly the net-zero clean electricity regulations, which Ottawa would suspend if Alberta strengthens its carbon pricing measures.
Implementing an effective carbon price on major emitters, such as the oil and gas sector, is widely recognized as a crucial strategy to reduce harmful emissions, potentially rendering the federal government’s proposed oil and gas emissions cap unnecessary, as outlined in the 2025 Climate Competitiveness Strategy.
Moreover, adjustments to the Competition Act to combat deceptive environmental advertising practices, known as greenwashing, were also unveiled in the recent federal budget. The Alberta government and industry advocates have called for the repeal of these regulations.
The forthcoming agreement is expected to address the necessity for Alberta to engage in discussions with the B.C. government regarding the development of an oil pipeline to the northwest coast. It may also touch upon Indigenous ownership and equity requirements, as well as the importance of trilateral engagement with British Columbia.
While the details of the MOU are not finalized, B.C.’s Energy and Climate Solutions Minister, Adrian Dix, highlighted that the focus appears to be on a speculative pipeline project without a confirmed route or buyers. He emphasized the absence of a concrete project at this stage, indicating that the MOU is still in the early stages of development.
Natural Resources Minister Tim Hodgson affirmed the government’s willingness to collaborate with proponents who have the support of First Nations and relevant authorities to address any obstacles to the project. The Alberta government declined to provide further specifics at this time, with a spokesperson expressing the intention to share more information in the near future.
The agreement is also expected to underscore the importance of advancing the $16.5-billion Pathways Alliance carbon capture and storage initiative, aiming to capture emissions from northern Alberta facilities and store them underground near Cold Lake. Greenpeace Canada’s Senior Energy Strategist, Keith Stewart, criticized the preliminary details of the MOU, characterizing them as a significant deviation from Canada’s climate commitments and Indigenous rights, warning of the potential environmental repercussions of expanding oil production for the proposed pipeline.