(Nov 28) : Prime Minister Mark Carney unveiled a sweeping energy plan with the province of Alberta that paves the way for a new oil pipeline, a massive carbon capture project and the construction of nuclear power for data centers.
The plan is aimed at reducing Canada’s economic dependence on the US and is meant to “unlock the full potential of Alberta’s energy resources” while creating “hundreds of thousands of new high-paying careers for Canadians,” Carney’s office said in a news release.
Carney told a business audience in Calgary that Canada’s tight interdependence with the US — once a strength — is now a weakness. The country shipped more than 95% of its energy exports to the country last year, before President Donald Trump began slapping tariffs on Canadian goods.
“This is a rupture, not a transition, which means our economic strategy needs to change dramatically and rapidly,” Carney said. “Nostalgia is not a strategy. The US has changed. That’s their right. We must respond. That’s our imperative.”
The document pledges the federal government’s support for one or more new oil pipelines with Indigenous ownership that transport “at least one million barrels a day of low emission Alberta bitumen with a route that increases export access to Asian markets as a priority.”
If the pipeline project goes through proper consultation, gets federal approval and has Indigenous co-ownership, the Canadian government will enable it to ship from a deep-water port on the west coast and “adjust” a ban on oil tankers on British Columbia’s north coast if necessary, the document says.
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It also promises to suspend or drop some federal environment regulations in exchange for a higher industrial carbon price and a timeline for building the C$16.5 billion ($11.8 billion) Pathways carbon capture project in Alberta’s oil sands. The document confirms Canada will not implement a cap on emissions from the oil and gas sector.
The plan promises both a nuclear power strategy and a data center strategy for Alberta, and to “significantly increase” electricity transmission connections between Canada’s western provinces. It commits to net zero emissions in the energy sector by 2050.
The document, styled as a memorandum of understanding, is meant as a “grand bargain” between Carney and Alberta Premier Danielle Smith on energy and climate policy, offsetting increased oil production with stronger commitments to industrial carbon pricing and clean power generation.
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The agreement marks a significant leap forward in the relationship between Alberta and Ottawa, which was deeply strained under Carney’s predecessor Justin Trudeau — the architect of policies such as the tanker ban. The lack of infrastructure to ship crude to Asia is one of the grievances cited by Alberta separatists.
But it also sets up a battle with the western province of BC, where Premier David Eby and Indigenous groups have angrily attacked the prospect of a new oil pipeline running to the ecologically sensitive north coast. Eby said Thursday the proposal risks upending Indigenous support for billions of dollars’ worth of major projects, including liquefied natural gas investments, in his province.
“We need to make sure that this project doesn’t become an energy vampire with all of the variables that have yet to be fulfilled — no proponent, no route, no money, no First Nations support,” Eby said. “It cannot draw limited federal resources, limited Indigenous governance resources, limited provincial resources away from the real projects that will employ people.”
At the moment, there is no actual proposal in front of Carney’s government for building an oil pipeline through BC. Smith has blamed federal regulations for the lack of a private sector proponent, and instead tasked her provincial government with developing a detailed project pitch until the private sector is ready to take over.
Thursday’s document says the pipeline pitch will be ready by July, but also outlines a promise to “collaborate” with BC on sharing the economic benefits of the project. It foresees the potential use of loan guarantees to enable Indigenous co-ownership.
With these conditions met, Carney’s government would declare the pipeline “a project of national interest” and refer it to the Major Projects Office, which creates the potential to fast-track it through approvals.
“There’s a lot more work to do,” Carney said at a news conference. “If there’s not a private-sector proponent, there won’t be a pipeline.”
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Fixing Carbon Pricing
Along with the pipeline, the plan commits Alberta and oil sands companies to building the Pathways carbon capture project — the world’s largest such initiative — and requires a separate memorandum of understanding on how to build it by April. It pledges that the first phase of Pathways will be built “in a staged manner between 2027 and 2040 to achieve committed emissions reductions at date-certain intervals.”
Kendall Dilling, president of Pathways Alliance, said in a statement the consortium of oil-sands producers looks forward to working with the federal and Alberta governments on their “shared goal of Canada becoming an energy superpower.”
The document also shifts the burden of environmental policy onto the industrial carbon pricing system, which is currently dysfunctional due to an oversupplied market and a collapsing credit price.
The plan says Canada will suspend its clean electricity regulations in Alberta while the two governments negotiate a new carbon pricing agreement — due in April — and upon completion Alberta will be exempt from the electricity rules. The carbon price will rise to a minimum effective credit price of C$130 per metric ton, the document says, but beyond that the details are vague.
“This industrial carbon pricing agreement will include a financial mechanism to ensure both parties maintain their respective commitments over the long term to provide certainty to industry, and to achieve the intended emissions reductions,” the document says.
Carney said his government would unveil a new electricity strategy early in 2026 that would aim to double Canada’s clean grid and increase its reliance on hydro, wind, solar and nuclear power.
Smith, speaking at a separate news conference, heralded a new relationship with Ottawa after a decade of Trudeau. “The last 10 years have left hundreds of thousands of Albertans skeptical and oftentimes questioning the long-term viability of our nation as we watched its deliberate phase-out of our province’s most valuable asset,” she said.
Trudeau did get a major piece of oil infrastructure built during his time in office: the expansion of the Trans Mountain pipeline, which opened earlier this year and tripled its capacity to export Alberta’s oil from BC’s coast. The government still owns the pipeline, and is looking at options to add further capacity.
Michael Bernstein, head of Clean Prosperity, a low-carbon economy advocacy group, said Canada and Alberta are starting down the right path by prioritizing strong carbon markets.
But the deal risks fracturing the unity of Carney’s Liberal caucus, which includes BC lawmakers as well as environmental advocates such as former Greenpeace activist Steven Guilbeault.
Guilbeault resigned his cabinet position as Minister of Canadian Identity and Culture following the announcement.
Climate advocacy groups lambasted the agreement, with Greenpeace Canada’s Keith Stewart saying it is “so much worse than we expected, and we expected it to be bad.”
uploaded by Isabelle Francis
