Canada and Alberta sign agreement to boost energy supply chain

Canada and Alberta have struck a wide-ranging energy memorandum of understanding that would more than double oil exports to Asian markets, suspend key federal regulations and support what both governments call a path to becoming a “world energy superpower.”

The deal commits both governments to work with industry and Indigenous partners on a privately financed, Indigenous co-owned bitumen pipeline capable of transporting more than one million barrels per day to a deep-water port serving Asian markets. Ottawa has declared such a project to be in the national interest.

It would be built in addition to the Trans Mountain expansion, which is expected to add 300,000 to 400,000 barrels per day for export.

The federal government has also agreed not to implement its planned oil and gas emissions cap and has suspended the Clean Electricity Regulations in Alberta. Both governments will instead collaborate on long-term carbon pricing and sector-specific standards under Alberta’s TIER system, as well as a methane reduction agreement by 2026.

The accord includes plans to support construction of “thousands of megawatts” of AI computing power, develop a new industrial carbon pricing deal and partner with industry to advance what is billed as the world’s largest carbon capture, utilization and storage project through the Pathways Alliance.

Alberta Premier Danielle Smith called the agreement “Alberta’s moment of opportunity to take the first steps toward being a global energy superpower and show the nation that resource development and sustainability can coexist.”

Alexander First Nation Chief George Arcand Jr. said, “This pipeline is an excellent opportunity to demonstrate partnership and progress,” adding that Indigenous equity ownership helps “build trust and a future that will support generations to come.”

The Alberta Indigenous Opportunities Corporation has been named a partner for the project. Both Alberta and B.C. First Nations groups will need to sign off on the project for it to move ahead, and not all groups have voiced support.

Industry groups also praised the commitment to drop the emissions cap. Tristan Goodman of the Explorers and Producers Association of Canada said it “sends an important signal that Canada’s oil and gas development is integral to the economy and is open for business,” while Business Council of Alberta president Adam Legge said its removal “was a cap on production and prosperity in Canada.”

Pathways Alliance president Kendall Dilling said the group appreciates the “leadership of both Prime Minister Carney and Premier Smith” and looks forward to working toward the shared goal of making Canada “an energy superpower.”