Oil sands carbon capture deal clears path for new pipeline, eases Alberta carbon rules

The Alberta government, Ottawa, and five major oilsands producers have signed a memorandum of understanding to advance the multibillion-dollar Pathways carbon capture and storage project, a deal that is directly tied to the approval of a new West Coast oilsands pipeline. According to CityNews and Narcity, the project is a prerequisite for that pipeline and is designed to offset some of the emissions that the new infrastructure would generate.

2 sources

NarcityAlberta, Ottawa and oilsands companies reach Pathways agreementCityNewsAlberta, Ottawa and oilsands companies reach Pathways agreement

"The Pathways project is a condition for a new West Coast oilsands pipeline moving ahead, and would serve to offset some of the carbon emissions that infrastructure would enable."

The project is led by the Pathways Alliance, a consortium that includes Canadian Natural Resources, Imperial Oil, and Suncor, among others, as reported by Narcity. The memorandum of understanding sets a completion date of Jan. 1, 2035, and outlines a phased approach to rolling out the carbon capture infrastructure.

"Canadian oil sands companies would be allowed reduced stringency requirements under Alberta’s carbon market if they deliver emissions reductions through a long-awaited carbon capture, utilisation, and storage (CCUS) project, under a new memorandum of understanding (MoU)."

Carbon PulsePathways CCUS deal would ease TIER rules for Canadian oil sands producers

Under the agreement, the federal government has committed to extending investment tax credits for carbon capture equipment to 2035, while Alberta says it will finalize its own incentive program for the technology, according to Narcity. The eased stringency under Alberta's carbon market, noted by Carbon Pulse, gives producers a regulatory incentive to meet the project's targets. Political analyst Lori Williams told CTV News that Mark Carney's message of Canadian unity resonated with Albertans at the Calgary Stampede, though the broader political context of the deal remains focused on balancing emissions reductions with pipeline expansion.