Agreement reached on multibillion

Agreement reached on multibillion-dollar Pathways carbon capture and storage project

Alberta, federal government, five oilsands companies entered deal on July 2

The Alberta government, Ottawa and five major oilsands producers have signed a memorandum of understanding to advance the multibillion-dollar Pathways carbon capture and storage project.

The Pathways project is a condition for a new West Coast oilsands pipeline moving ahead, and would serve to offset some of the carbon emissions that infrastructure would enable.

The governments have agreed to pursue regulatory and fiscal policies that would spur oilsands production growth, which in turn would ensure the pipeline from Alberta to a tanker port in southern British Columbia can be filled.

The Pathways agreement was announced Monday, but signed on July 2 — the same day Alberta filed its pipeline proposal to the federal major projects office.

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"The biggest nation-building projects in Canada's history have succeeded through partnership. This agreement shows what can be achieved when governments and industry work together to grow our economy, strengthen our energy security and unlock new opportunities for people across Canada," Alberta Premier Danielle Smith said in a news release.

The Pathways-pipeline quid pro quo was part of a sweeping accord Ottawa and Alberta signed in November on a wide array of energy matters.

"Over the last eight months, we have been steadily delivering on each commitment in the Canada-Alberta MOU, working with Alberta and the energy industry to build major energy infrastructure, reduce emissions, create jobs and prosperity and secure energy sovereignty," said Tim Hodgson, the federal energy and natural resources minister.

The federal government has committed to extending investment tax credits for various carbon capture equipment to 2035, and Alberta says it will finalize its own incentive program for carbon capture.

How the Pathways carbon storage project would work, if built

The memorandum of understanding says the Pathways Project would proceed in stages, with infrastructure in service by Jan. 1, 2032, and the project completed three years later.

The five energy companies behind the Pathways alliance are Canadian Natural Resources, Imperial Oil, Suncor, Cenovus Energy and ConocoPhillips.

"We believe we've achieved a framework that is positive for the oilsands industry and provides a step forward to help enable production growth and to advance the Pathways Project," said Kendall Dilling, president of the Oil Sands Alliance.

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The Pathways Project will have the capacity to transport and store about six million tonnes per year of captured carbon dioxide by the mid-2030s, the alliance said.

The project involves a pipeline network that would carry CO2 captured from various oilsands sites in northern Alberta to an underground storage hub near the city of Cold Lake.

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