OTTAWA — “Grand cut price” was the phrase of the day on Parliament Hill after Prime Minister Mark Carney and his provincial counterparts discovered frequent floor on oil and fuel growth.
“If (the Conservatives) had been listening to yesterday, there’s a grand cut price,” Power Minister Tim Hodgson boasted to the Opposition benches.
“There’s a cut price that the Premier of Alberta has signed onto.”
Alberta Premier Danielle Smith left Monday’s first ministers’ assembly with a brand new deal exchanging oil sands entry to coastal waters for enormous investments in decarbonization applied sciences, however specialists warn this may very well be a expensive pipe dream.
“I’m anxious we’re seeing (the primary ministers) fall right into a entice of desirous to have their cake and eat it too,” mentioned Tim McMillan, a associate at Garrison Technique and the previous head of the Canadian Affiliation of Petroleum Producers.
Smith mentioned Monday night
by the inclusion of language endorsing the motion of “decarbonized Canadian oil and fuel by pipelines”
within the assembly communiqué
.
“Let’s name it the grand cut price,” Smith instructed reporters in Saskatoon, referring to the thought of twinning new pipeline proposals with large-scale decarbonization tasks.
Carney mentioned Monday that
he’d take into account fast-tracking
a brand new oil pipeline to the West Coast if it shipped “decarbonized barrels” to new markets.
“There’s actual potential there (and), if additional developed, the federal authorities will look to advance it,” mentioned Carney.
However McMillan says the satan may very well be within the particulars.
“I don’t know precisely what they’re speaking about with decarbonization, however… it might be linked to carbon seize, which doesn’t enhance our exports (or) investability,” mentioned McMillan.
“If (carbon seize) turns into a long-term requirement for brand spanking new tasks, it’ll possible have a damaging impact on future investments in Canada’s upstream oil and fuel sector.”
The
Calgary-based Pathways Alliance
a gaggle of six main oil sands producers, has put ahead a $16.5-billion decarbonization community that may reroute carbon emissions from almost two dozen amenities to an underground hub close to Chilly Lake, Alta.
The large-ticket mission has been at a
standstill for years over authorities funding
.
Smith mentioned Monday that the monetary windfall of a brand new West Coast bitumen pipeline serving markets in Asia might assist make the economics of the Pathways mission work.
“If we had one million barrel a day pipeline going to the northwest (British Columbia) coast, that may generate about $20 billion a 12 months in revenues… that looks as if a fairly good worth proposition if each of these tasks can proceed directly,” mentioned Smith.
Carney and Hodgson have
to the Pathways mission in current weeks, however the enterprise nonetheless faces an uphill battle.
A current unbiased evaluation discovered the mission was
as a result of restricted recyclability of captured carbon.
“Even underneath optimum circumstances, the Pathways mission might battle to interrupt even, and real-world operations are not often optimum,” learn the examine, ready by the Institute for Power Economics and Monetary Evaluation.
“The Canadian federal authorities and the province of Alberta could also be pressured to make up the possible shortfall,” it continued.
“An unprofitable carbon seize mission will battle to convey lasting optimistic financial advantages to host communities and turn into depending on exterior monetary subsidies to take care of operations.”
McMillan additionally famous that Canada’s two largest rivals within the heavy oil trade, Mexico and Venezuela, are unlikely to observe swimsuit with large-scale carbon seize tasks of their very own, giving every an edge over Canada on a per-barrel foundation.
Janetta McKenzie, the director of the oil and fuel program on the Pembina Institute, says the Alberta authorities’s current determination to freeze
its industrial carbon tax
at $95 per tonne additional harms the mission’s viability.
“Freezing that value really makes issues like (Pathways) much less more likely to transfer ahead, as a result of corporations can’t moderately predict the worth of credit they will earn sooner or later,” mentioned McKenzie.
Pathways’ President Kendall Dilling mentioned Tuesday he was excited by the developments over the previous 24 hours.
“Pathways Alliance is inspired by the work our federal and provincial governments have been advancing, most just lately on the First Ministers’ assembly,” wrote Dilling in an electronic mail to the Nationwide Publish.
“We’re able to work collectively for Canada’s financial and vitality future and supply enter on how Canada can take away obstacles and develop insurance policies to develop Canada’s oil sands and construct infrastructure that brings our oil to various markets. On the identical time securing the way forward for Canada’s oil sands by making it aggressive in international markets.”
Nationwide Publish
rmohamed@postmedia.com
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