Premier says Smith-Carney pipeline deal will miss initial deadline
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The first set of deadlines included in the energy and climate agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith are not expected to be met, reflecting early challenges with the agreement that includes pushing a new export pipeline from Alberta to the West Coast.
The MoU includes a specific deadline to be reached by April 1. But when CBC News asked him about the issue on Monday in Houston, Texas, Smith described a delay in negotiations, where the prime minister is attending CERAWeek, an international energy conference organized by S&P Global.
“We don’t want to delay too much. We know we need certainty in the market, but that’s the time frame we’re working to,” he said.
Deal details
Last November, Carney and Smith signed a memorandum of understanding that would give Alberta special exemptions from federal environmental laws and provide political support to a new oil pipeline on the BC coast.
The first set of deadlines in the deal include:
- A cooperation agreement on impact assessment.
- Methane Equivalency Agreement.
- Carbon pricing equivalence agreement.
- A tripartite MoU with Pathways Companies.
Smith said, working together on the first agreement has been completed while an announcement on the second agreement is coming. However, deals on an industrial carbon tax and working with oilsands companies to develop pathways carbon capture projects are proving more difficult.
The Oilsands Alliance is a consortium of companies that have pledged to reach net-zero emissions. The centerpiece of his plan is the Pathways project, which would capture emissions from 20 oilsands facilities in northern Alberta and transport them by pipeline 400 kilometers to a terminal near Cold Lake, Alta., where they would be stored underground. The facility will be built in phases between 2027 and 2040.
Companies behind the project Not there. Final investment decision taken.
“We have to sit down to a three-part agreement with the Pathways group,” he said. “I’m hopeful that we’ll be able to get that done in the next few weeks.”
industry concerns
This delay is due to concerns raised by the industry regarding the industrial carbon pricing policy. (In one of his first moves as prime minister, Carney Cut the consumer carbon taxBut left the industrial intact.)
In January, the Canadian Association of Petroleum Producers issued an open letter arguing that the high costs of carbon emissions would harm the country’s competitiveness at a time when the US is demonstrating “a willingness to leverage all the tools at its disposal to achieve geopolitical and energy goals.”
Smith and Carney reached a compromise last year that included rolling back some federal environmental policies.
In a speech Monday, Natural Resources Minister Tim Hodgson said the federal government remains committed to the deal with Alberta to develop the energy sector.
“Both Canada and Alberta agree that we must unlock and increase natural resource production and transportation in Western Canada, so that we can bring our energy and natural resources to our partners, in collaboration with Indigenous peoples and industry,” Hodgson said while opening the Canadian pavilion at the CERAWeek by S&P Global Energy conference.
Smith has confidence in the interest of the foreign company
The Alberta government continues to develop new oil pipeline project proposals, including consideration of five potential ports in British Columbia.
No private company has yet shown interest in purchasing this project or building the pipeline.
Nevertheless, Alberta’s Prime Minister is confident there will be interest from foreign companies and sovereign wealth funds to invest in the potential pipeline.
“Yes, I would very much hope so,” she said. “Maybe not a majority stake, but at least a substantial stake, maybe 15 or 30 percent.”
Foreign companies already have investment in the country’s energy sector. Smith pointed specifically to LNG Canada, a consortium of five international companies from Europe, Malaysia, China, South Korea and Japan that owns a natural gas export facility in Kitimat, B.C., which began operations last year.
“Whether it’s Asian company partners or Middle Eastern partners or Canadian companies or American companies, I expect there will be a huge amount of interest from foreign stakeholders.”
