Carney’s new Alberta oil pipeline deal already faces opposition

Prime Minister Mark Carney has signed a deal with the province of Alberta that opens the door to an oil pipeline to the Pacific – a project long pushed by Canada’s oil heartland, but which faces significant hurdles before being built.

The energy deal, signed Thursday by Carney and Alberta Premier Danielle Smith in Calgary, exempts the proposed pipeline from certain federal environmental laws.

In return, Alberta must increase carbon pricing and develop the world’s largest carbon capture program to reduce its emissions.

The agreement marks a historic reset between Alberta and Ottawa, but raises doubts about whether the project could become a reality without buy-in from those who oppose it.

On Thursday, Smith called the deal a “first step” for his pipeline project.

She added that this marks the end of “dark times” for her province, which she said has been prevented by federal environmental laws from exploiting its resources.

Carney, meanwhile, said he supports the Alberta project as crucial to the country’s economic development by helping sell more Canadian oil to Asian markets.

The United States is currently the largest buyer of Canadian crude oil, accounting for more than 90% of exports, according to 2023 data from the Canada Energy Regulator.

Carney said Canada’s economic ties with the United States have become vulnerable in light of protectionist tariffs put in place by President Donald Trump and he aims to double non-U.S. exports over the next decade.

The agreement signed by Carney and Smith exempts the proposed pipeline from the tanker ban off the coast of British Columbia and commits to suspending the federal cap on oil and gas emissions – a significant reversal from the policies of Carney’s predecessor, former Prime Minister Justin Trudeau.

It also specifies that the pipeline must be co-owned by Aboriginal people and financed by a private company and not by taxpayer money.

The agreement adds that Alberta and Ottawa will bring British Columbia (BC) “immediately” to a discussion on the project.

The Alberta government is the project’s lead proponent, pledging C$14 million ($10 million; £7.5 million) to develop a proposal that the province hopes will later be taken up by the private sector.

The plan is in its preliminary stages and no final route has yet been identified, although it is expected to pass through British Columbia’s north coast.

British Columbia Premier David Eby opposed the project, calling it “unacceptable.” He was excluded from the negotiations that led to the agreement.

Eby also expressed concern that an oil pipeline through British Columbia could jeopardize support from Indigenous communities for liquefied natural gas projects his province is pursuing.

He called the Alberta pipeline “fictitious,” noting that no private company has stepped in to finance it.

The project also faced opposition from some indigenous and environmental groups. A group representing British Columbia’s coastal First Nations said in a statement Wednesday that an oil pipeline to the province’s north coast “will never happen.”

The Montreal Economic Institute, a non-profit think tank based in Quebec, called the agreement “a clear departure from Ottawa’s long-standing hostility toward pipelines” but expressed doubts that the proposed pipeline would become a reality.

“Prime Minister Eby appears to categorically reject such a project, so unless he decides not to use his veto, a new pipeline will remain a pipe dream,” said Gabriel Giguère, senior political analyst at EMI.

Conservative Leader Pierre Poilievre said the memorandum only launches a long process that does not guarantee its completion.

“This comes from a Prime Minister who promised during the election campaign to act with unimaginable speed,” the opposition leader said.

Meanwhile, a left-leaning New Democratic Party MP called the deal “appalling” and “disrespectful” to British Columbia and its Indigenous communities.

“Right now, if you’re a Liberal from coastal British Columbia, you should be very deeply concerned,” said NDP MP Gord Johns, who represents a riding on Vancouver Island.