Canada’s new energy and natural resources minister championed the energy sector Friday, calling on governments and industry to work together to build the Pathways Alliance’s proposed carbon capture project.
In a keynote speech to the Calgary Chamber of Commerce, Tim Hodgson pitched his government’s vision of Canada as an energy superpower — exporting oil and gas to the world for decades to come — and pledged to be a voice for Alberta and Western Canada at the cabinet table.
“We need infrastructure that gets our energy to tidewater and to trusted allies — diversifying beyond the US,” he said. To do this, the federal government will fast-track approvals of projects in the “national interest” with Prime Minister Mark Carney’s promised policy of "one project, one review,” less red tape and more certainty, Hodgson said.
“I think he was trying to set a tone that says, ‘We're going to change the system’,” said Richard Masson, an executive fellow at the University of Calgary's School of Public Policy and the former CEO of the Alberta Petroleum Marketing Commission
Masson said Hodgson’s speech signalled that the government is “going to focus on getting things done and make it more attractive for private-sector development and investment.”
Alberta Premier Danielle Smith has been relentless in her calls for the federal government to abandon its proposed regulations to cap oil and gas sector emissions and scrap the Impact Assessment Act, among other environment and climate policies. Carney recently opened the door to making changes to these key policies to move projects forward.
Hodgson’s speech doesn’t reference these two policies by name but leaves that question open, said Masson and Martin Olszynski, an associate professor and chair in energy, resources and sustainability at the University of Calgary. Oil and gas is the country’s largest emitting economic sector and the draft regulations would require oil and gas companies to cut emissions by 35 per cent below 2019 levels by 2030.
“He didn't explicitly say what he was going to do, but I think there is … a recognition that some of this stuff has to change or they won't achieve their objectives,” Masson said, referring to the goal of reducing emissions and exporting energy.
To Olszynski, Hodgson’s speech suggests “a willingness to discuss and even adjust current policies … but it will be backstopped with an intention to still meet some of those goals.”
Hodgson, in his speech, placed particular emphasis on the $16.5-billion Pathways Alliance project to capture carbon dioxide from 13 oilsands sites in northern Alberta and send it to an underground storage site south of Cold Lake through 600 kilometres of pipeline.
“We will invest in carbon capture, methane reduction and other technologies to ensure Canadian oil and gas is not only produced responsibly, but is the most competitive in the world,” Hodgson said.
“This government will not be a government of talk, but a government of action. We need the same from the province of Alberta and the Pathways Alliance.”
The Pathways project is undergoing regulatory reviews for over 100 different segments, but on the business side, the project is still awaiting a final investment decision. A global think tank, the international Institute for Energy Economics and Financial Analysis, found the project’s business model is shaky.
Masson said the federal government has a lot of work to do to establish certainty for investors. The potential for a cap on oil- and gas-sector emissions and uncertainty around carbon credits would “complicate everything to the point where nobody would be willing to invest.”
“It's going to take getting everybody in a room and sorting out where the real barriers are,” Masson said.
According to Hodgson’s speech, his government is ready to do the work to create certainty and turn Canada into an energy superpower, but needs a willing partner.
“We need to demonstrate to our customers outside the US, and to our fellow Canadians, that we are a responsible industry — and this government believes Pathways is critical to that reality,” Hodgson said.
Hodgson played up his Western roots and business background for the oil and gas crowd, particularly his time as a board member at MEG Energy, and at Goldman Sachs, where he brokered the Alliance Pipeline deal to move natural gas from northwestern Alberta and northeastern British Columbia to the American midwest.
He also pointed to his time as board chair of Hydro One and belief that Canada’s future depends on integrated electricity grids.
“Our new government will quickly work with provinces and territories on east-west transmission and better integrate our systems,” Hodgson said, adding this is part of Carney’s stated goal of creating one economy, not 13.
This idea of an east-west transmission grid is a clear priority for the federal government and a big deal, both in terms of energy security and decarbonization goals, Olszynski said.
“A lot of people are waiting with bated breath to figure out what's the direction this government is going to go in,” Olszynski said.
“We're starting to see the contours of that here … I'll be watching to see how the province responds and how industry responds now.”
Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer
Comments
Too bad carbon capture has only limited application in the oilsands.
Too bad taxpayers are on the hook.
Huge opportunity costs.
More emissions can be cut at lower cost elsewhere in the economy.
Dollars spent on fossil fuels are dollars not spent on renewable energy, public transit, affordable housing, etc.
The O&G industry grossly under-reports its emissions of all types.
Ramping up fossil fuel production using Canada's carbon-intensive oil boosts global emissions.
A plan to fail.
In 2021, Carney wrote a book called "Values: Building a Better World for All":
"A bold and urgent argument by the Prime Minister of Canada and former bank governor on the radical, foundational change that is required if we are to build an economy and society based not on market values but on human values."
Where is the radical, foundational change?
Fossil-fuel expansion and propping up Canada's largely foreign-owned O&G industry is Poilievre's agenda. Now it's Carney's too.
Where do duplicity and cynicism rank among Carney's values?
Looks like PP's Conservatives may have lost the election but won the argument....if Canada doubles down on tarsands oil and wastes public dollars on carbon capture, a technology that doesn't do anything but delay the transition off fossil fuels that is actually needed....than the future is bleak.
Global warming has already destabilized the climate....costs of extreme weather are rising. In fact, the real contest of a fossil fueled future is going to be which costs taxpayers more: Extreme weather events.......or the subsidies that will be necessary to keep unconventional oil and fracked gas pipelines running. Carbon Capture and Storage?? The totally subsidized icing on that black cake.
One last boondoggle from an industry that continues to promise wealth and deliver climate disasters.
Please, please National Observer, kill the Energy East 2 talk. It's ridiculous. Anyone who's looked at the economics knows it's a non-starter. Politicians can keep talking about it to keep the base engaged but responsible journalism demands that the facts be stated every time, until the general public understands: a pipeline to transport Alberta bitumen to Atlantic tidewater makes no economic sense.
But it does make a kind of ideological sense..........if lobby groups like Pathways Alliance can convince Canadians its a way to gain independence from the American Empire.
People buy all kinds of none sense if you can keep them scared enough....and for the hard hats building the pipeline....it can mean 4-6 years of good wages. Heke: They prefer that there be resistance.....cost overruns are no problem when you're living off the public dime.
Whatever the Federal does, please do not subsidize carbon capture! The process is very costly and does not generate any new value. No sane business would invest in that, so why should the government invest public dollars? After decades of subsidies, the oil and gas industry is a fully mature business that must now finance itself. The government should not invest any more public dollars in that, and certainly not facilitate any more environmental degradation of any type.
Canada is already a major energy superpower; currently, this energy is in the form of fossil fuels, its time to focus on renewable energy.
If the Carney Liberals build -- or should I say ram -- another pipeline through BC using a huge sum of public money (read: taxpayer supported debt) they will lose the progressives who moved from the NDP to temporarily park their votes with the Libs to keep Poilievre from the big chair in 2025.
That would be especially galling because Carney is smart and has spoken repeatedly about the peak in oil and gas fast approaching, can read a demand curve on energy trends in China, SE Asia, the EU and the global south like it is child's play, and wrote extensively about the economics of climate change, on both the costs of inaction and on the benefits of action.
If Carney joins the Dark Side, that leaves activists, some smart cities and scientists to carry the bag while the Conservative Party wreaks havoc after winning the next election.
That should read "any pipeline anywhere that touches tidewater," not just BC.
Is Carney that terrorized by Danielle Smith and separatists who love to scream but who will lose most of their courage in the voting booth if it meant giving up their Canadian citizenship? They wouldn't know where to begin to build an independent country, so they will probably ask Trump to intervene. If Carney goes too far to appease the loudmouths and Alberta becomes semi-detached from the nation and is given special powers, then that would simply a minefield of his own making.
Is there something wrong with an economist merely asking the oil and gas proponents for a solid peer reviewed business case and some genuine demand analysis on the notion that oil is forever and, therefore, the feds need to open the funding spigots wide? Is it too difficult for the former governor of two national banks to ask the hard questions on the business and economics behind the call to build more pipes, or is he willing to barrel on and commit at least $100B in federal funds and shove the consultation and environmental reviews aside to satiate the greed of foreign oil companies?
These are important questions
No one ever mentions that "carbon capture" is really carbon dioxide capture, and that carbon dioxide is two thirds oxygen. Photosynthesis could one day return that oxygen to us, but if it is permanently stored underground it is gone forever. Let's just not burn the fossil carbon to begin with.