Premier Danielle Smith believes a framework for a federal-provincial agreement on ramping up Alberta’s industrial carbon price has largely been reached with Prime Minister Mark Carney — one that could be unveiled as early as this week. She also expressed confidence that the prime minister wants to see a new oil pipeline to the Pacific Coast go forward.
Pipeline prospects
“Yes, absolutely,” Smith said in an interview when asked if Carney supports a new pipeline. “We’ve made our case that if we want to have an advantage in accessing Asian markets, then the best way to do that is to build a pipeline that is the shortest route to those Asian markets.” She added, “If we are going to open up those markets and demonstrate that Canada works and demonstrate the partnership, it kind of makes sense for us to build a made-in-Canada pipeline, so I feel very confident.”
Alberta’s premier and the prime minister sat down Friday for a 45-minute chat in Ottawa, discussing their joint federal-provincial energy accord, which was signed five months ago. Under the memorandum of understanding (MOU), Ottawa committed to declaring Alberta’s proposed bitumen pipeline to the Pacific Coast a project of national interest. It can be referred to the Major Projects Office for expedited federal approval. However, a new pipeline to the British Columbia coast depends on the massive Pathways carbon capture project in the oilsands advancing, a proposal that has not received the green light from members of the Oil Sands Alliance.
Carbon price negotiations
As part of the MOU, the province agreed to negotiate a new industrial carbon price agreement under its Alberta’s Technology, Innovation and Emissions Reduction (TIER) system, increasing the levy on large emitters to an effective rate of $130 per tonne, but the pact didn’t spell out when the level must be hit. The price is currently frozen at $95 a tonne, although carbon credits trade at a much lower level. The debate over the pace of the increase has led to protracted discussions, and the two sides missed an initial deadline of April 1 for a carbon price accord.
One source told the Herald that the federal and provincial governments have now agreed Alberta’s effective carbon price needs to reach $130 a tonne by 2040, with stages and steps to reach that level. The two governments are discussing the details of potential financial mechanisms — including a possible floor price and a contract for difference — in support of stabilizing the TIER carbon trading market. Smith wouldn’t comment on the 2040 timeline or on specifics of the talks, but she indicated the two sides made “substantial” advancements Friday and thinks they have the framework of an agreement on industrial carbon pricing.
“I would say yes, I think we do,” the premier said. “We’re still inking the deal, and we just have to make sure that some of the undertakings that the prime minister and I had are worked out. We’ve given some direction to our various officials to finalize things and so we’ll just have to let that play out over the course of the next week.”
Broader energy accord
The broader MOU covers an array of energy and environmental issues, such as methane regulations, consideration of a new oil export pipeline to the Pacific Coast, and advancing the Pathways carbon capture project. The decarbonization initiative, estimated to cost about $20 billion, would connect various oilsands facilities in northern Alberta to an underground CO2 storage hub near Cold Lake. “In the face of global trade shifts, (Alberta’s premier) and I are working to build a stronger, more independent, and more sustainable economy,” Carney wrote Friday on social media. “We met in Ottawa today to discuss how we can unlock the full potential of Alberta’s resources (and) lower emissions.”
