Alberta Premier Danielle Smith has acknowledged that the deadline for finalizing two agreements related to her significant energy deal with Ottawa will not be met. The memorandum of understanding, established in November, outlined various commitments and actions both governments would take to eventually construct a new bitumen pipeline connecting Alberta to B.C. tidewater. This agreement set an April 1 deadline for four crucial arrangements necessary for pipeline approval. Smith and Prime Minister Mark Carney have reached “agreements in principle” on two items – methane emissions and project assessment processes. However, work is still needed on establishing a carbon pricing system and another memorandum of understanding with the Oil Sands Alliance.
One key aspect of the energy deal is the stipulation that Alberta’s industrial carbon price will eventually reach $130 per tonne. The negotiation currently revolves around the speed at which this price target will be achieved. Smith emphasized the importance of not escalating the carbon price too rapidly to avoid deterring investment. She pointed out that other jurisdictions without carbon pricing systems, like the United States, may be more appealing to investors. However, she clarified that she is not advocating for Alberta to forgo carbon pricing altogether.
The separate memorandum of understanding with the Oil Sands Alliance, a group comprising five major oil and gas companies, is dependent on finalizing the carbon pricing deal. Carney has emphasized that this project is a necessary condition for any new bitumen pipeline. Smith expressed her hope to conclude the carbon pricing agreement in the coming days, with the alliance agreement expected to follow by the end of April.
Both Smith and Carney underscored the urgency of reaching these agreements, with discussions ongoing to align their positions. Despite missing initial deadlines, the progress on the MOU signals a positive step forward, according to Evan Bahry, executive director of Energy Connections Canada. He highlighted the significance of advancing such a large-scale project and policy elements within a relatively short timeframe as indicative of the commitment to responsible resource development in Canada.
Carney, speaking in Quebec on Tuesday, expressed confidence in the negotiations, emphasizing the complexity and importance of the discussions. The MOU has set a deadline of July 1 for Alberta to submit a new application for the bitumen pipeline project to Ottawa’s major projects office.