After months of challenging talks, the Alberta-Canada energy pact appears set to finalize an increase in the province's industrial carbon price, but the oil and gas industry remains divided on the move.
Deal Details Emerge
The Carney and Smith governments have largely agreed to raise the effective carbon price in Alberta to $130 per tonne by 2040, with an announcement expected as early as this week, according to sources. This comes after the province's carbon price was frozen at $95 per tonne last year under the UCP government.
The memorandum of understanding (MOU) also includes commitments for Alberta to submit a proposal for a major new oil pipeline to the British Columbia coast, contingent on the Pathways carbon capture and storage project moving forward in the oilsands.
Industry Reactions
Some industry leaders oppose the industrial carbon tax, arguing it will make Canadian companies less competitive in attracting capital. Michael Belenkie, CEO of Advantage Energy, stated, "Simply put, I don't believe a carbon tax is an effective tool to incentivize investment in decarbonizing." He added that a floor price on the carbon tax is not supported.
Others see a long-term advantage. Paul Colborne, CEO of Surge Energy, expressed optimism: "I'm thrilled and optimistic that carbon pricing is maybe the last major issue to be dealt with." He emphasized the need for balance, noting that the deal could advance projects quickly.
Competitiveness Concerns
The higher carbon price, while below the federal plan of $170 per tonne by 2030, still raises concerns about investment attractiveness. The deal also ends the oilpatch emissions cap and Clean Electricity Regulations, which some see as key gains for Alberta.
As one industry source described it, the challenge is "how to go from high-level language in the MOU to a concrete agreement that moves projects forward while reducing emissions." The final details are expected to be closely watched by stakeholders across Canada.
