Here’s what you need to know about the energy deal between Ottawa and Alberta

Prime Minister Mark Carney and Alberta Premier Danielle Smith have jointly agreed on the path forward for a new bitumen pipeline to the BC coast – a critically important development that the federal government is framing as an opportunity to further develop Alberta’s energy sector, diversify Canada’s economy and reduce dependence on the US.

The two leaders are signing a memorandum of understanding detailing how Ottawa will facilitate the construction of a pipeline that would carry one million barrels of oil a day from Alberta’s oil patches to an export terminal on the Pacific coast, where that product would be shipped to mostly Asian markets.

The agreement emphasizes that the pipeline will be privately constructed and financed – unlike the publicly owned Trans Mountain – and the intention is to have some Indigenous co-ownership.

Ottawa is set to designate the pipeline as a project of “national interest,” which triggers powers under C-5, the Building Canada Act that Carney’s government passed in June.

That designation means the pipeline – and possibly tankers involved in oil transportation – may be exempt from certain federal laws. These include the Fisheries Act, the Species at Risk Act and the Impact Assessment Act, among others.

Canada is committed to “cooperating with Alberta to provide a clear and efficient approval process for the Alberta bitumen pipeline.”

Importantly, Alberta is “promising to collaborate with BC to ensure that British Columbians share the substantial economic and financial benefits of the proposed pipeline.”

Once some Indigenous consultation and negotiations have taken place with BC, Alberta, as the current proponent of this pipeline, will submit its plan to the Major Projects Office (MPO) for accelerated review by July 1, 2026.

If approved by the MPO, “Canada confirms that it will enable the export of bitumen from a strategic deepwater port to Asian markets, including through appropriate adjustments to the Oil Tanker Moratorium Act if necessary,” the agreement reads.

The intention is to put shovels in the ground on the project by 2029, according to an Alberta official who spoke to reporters at a background briefing.

Federal government to suspend clean power rules, proposed oil and gas limits

Ottawa will also suspend Alberta’s requirements under proposed federal oil and gas emissions limits and the Clean Electricity Regulation (CER).

But both parties are committed to raising the price of industrial carbon in the province – now up from $95 a tonne – to a minimum of $130 a tonne. The federal government had previously demanded that prices rise to $170 a tonne by 2030.

Both sides say they are committed to net-zero by 2050, despite the MOU which has the potential to turbocharge conventional energy production.

To help achieve that goal, both Canada and Alberta are moving forward with an Alberta-based carbon capture, utilization and storage project, Pathways Plus, which could reduce the emissions intensity of exports from the province’s oil sands.

Both sides are also agreeing to dramatically reduce methane emissions associated with the oil patch – aiming for a 75 percent reduction relative to 2014 emissions levels by 2035.

more to come