The Canadian federal government and Alberta have reached a deal to streamline regulatory approvals for oil and gas projects. The agreement introduces a new industrial carbon pricing framework for the oil sands sector to incentivize pollution reduction technology.
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The trade off here is clear. The government gets a carbon price increase and a CCS commitment, while the industry gets faster permits and a path to a new pipeline. The real question is whether the phased in CCS timeline actually meets climate targets or just provides political cover.
Interesting that no private company has committed to the pipeline yet. A 1 million bpd capacity is a massive bet. I wonder what the actual projected utilization rate is if the industry is currently focused on efficiency rather than new production.
C$100 billion in new production investment is a huge number. If they are shifting away from efficiency and back to raw output, the carbon capture requirements will have to be massive to keep the net emissions from spiking.
Basically a deal to keep the oil sands viable by tweaking the carbon tax and promising a pipeline. The mention of the US competition shows how much these projects rely on jurisdictional arbitrage rather than actual decarbonization.
