Fort McMurray, Cold Lake mayors celebrate new Pathways carbon capture agreement

Project considered a requirement for the feds to approve proposed West Coast pipeline

Now that an agreement has cleared major hurdles for the Pathways carbon capture and storage project, the mayors of the two communities that will host the infrastructure say they are looking forward to the construction and production jobs in their regions.

The Alberta and federal governments announced Monday that they had signed an agreement with five of the largest companies in the oilsands to pursue the project and also to increase oil production.

Community leaders in Fort McMurray and Cold Lake celebrated Monday’s news. Regional Municipality of Wood Buffalo Mayor Sandy Bowman said in a statement that “we know that when we succeed, Alberta and the rest of Canada succeed.”

“We have the ability and capacity to set an example for the world in how energy security, economic opportunity and social prosperity go hand in hand,” he said. “This partnership announcement is a step in the right direction.

“The important thing now is that this direction becomes reality, including for the people that call this place home.”

Cold Lake Mayor Bob Mattice said he is looking forward to the construction and production jobs that Pathways and the pipeline will create in northeastern Alberta. The city has already been preparing for an expansion of CFB Cold Lake, said Mattice.

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

“We are expecting unparalleled growth, hopefully, in our area,” he told CBC News. “Our task as a government is to make sure we've got things in place like housing and infrastructure.

“Our concerns are getting enough trades and builders to the area and managing the growth.”

Following through on the Pathways Project is a condition by the federal government for Alberta to have a new West Coast pipeline be built. The Pathways Project’s proponents say it will offset some of the carbon dioxide emissions from increased oil production to fill the pipeline.

Kendall Dilling, president of the Oil Sands Alliance group that represents five oilsands firms, told CBC News that Monday’s announcement shows other countries that Canada can meet their energy demands.

“To be honest, a lot of the rest of the world had written us off five years ago as a country that had no national consensus around developing our resources,” said Dilling.

“I know lots of people are saying, ‘Well, let’s see some action — there’s been lots of great talk.’ Today’s announcement is hopefully part of showing that this is translating into real projects moving ahead and making a difference in the country.”

‘Grow production while investing in carbon capture’

The plan for the Pathways Project is to use a 400-kilometre pipeline network to carry carbon dioxide emissions from 20 oilsands facilities in the Fort McMurray region to an underground storage facility in the Cold Lake area.

The trilateral agreement says six million tonnes of carbon dioxide would be captured annually by the mid-2030s and an additional 10 million tonnes by 2045.

The federal government has said that as of 2024, the oilsands produced 92 million tonnes of carbon dioxide emissions.

The project originally had an estimated price tag of $16.5 billion. But at an energy conference last month, Cenovus CEO Jon McKenzie said he believes Pathways will likely cost between $20 billion and $30 billion.

“Carbon capture and storage doesn't make money, it is a cost,” said Dilling. “[But] if we can create the conditions to grow production while investing in carbon capture, then it also works for companies and for their shareholders.”

Ottawa is using tax credits to help fund the project. This includes covering half the cost of eligible carbon capture equipment and 37.5 per cent for the transportation, storage and use equipment that is also needed.

Alberta, Ottawa, oilsands producers sign MOU on Pathways carbon capture project

The Alberta government pledges to “implement financial supports” to encourage oil production for pipelines, including a new West Coast pipeline.

"The biggest nation-building projects in Canada's history have succeeded through partnership," Premier Danielle Smith said in a statement.

Support, opposition for project

Smith said her province wants oilsands production to double to eight million barrels per day during the next 10 to 15 years. The proposed new West Coast pipeline would carry one million barrels of oil per day to the Roberts Bank Terminal in Delta, B.C. and then be loaded onto tankers bound for global markets.

The Pathways Project is opposed by environmental groups, a coalition of Indigenous communities and some nearby farmers who say they are concerned about increased oilsands production and the impacts the project will have on the environment.

Several First Nations have applied for a judicial review after they said in February they were not properly consulted on the project by Ottawa.

Janetta McKenzie, director of oil and gas at the Pembina Institute, a clean-energy think tank, said she is skeptical Pathways will curb long-term oilsands emissions.

“With the West Coast pipeline and several other pipeline proposals or expansions that have been put on the table … we’re just likely to see oilsands emissions go up,” she told CBC News.

Vincent McDermott covers Fort McMurray and the Wood Buffalo region for CBC News. He was previously the editor of Fort McMurray Today, where he was part of a team that won a National Newspaper Award for coverage of the 2016 Horse River Wildfire. He is also a former contributor to the official magazine of the Royal Astronomical Society of Canada. He can be reached at vincent.mcdermott@cbc.ca

With files from Radio-Canada’s Francis Plourde and The Canadian Press