Canada’s Carbon Plan Will Help Oil Patch in Future, Energy Minister Says

Canada’s energy minister said the government’s push to build carbon capture technology in the Alberta oil sands ensures the industry is adapting to change even as the US reverses its environmental policies.

“We’re future proofing our industry,” Tim Hodgson said at an event in Calgary. “We’re making sure we’re not that country that gets billions of stranded assets because we didn’t keep up with best in class technology.”

He made that point a day after President Donald Trump said the Environmental Protection Agency was rescinding a scientific determination that greenhouse gases pose a threat to human health and welfare. The Trump administration has aggressively pursued fossil fuel development while abandoning former President Joe Biden’s signature climate policies.

The Canadian government signed a memorandum of understanding late last year with the province of Alberta that pledged backing for a new oil pipeline in exchange for a higher industrial carbon price and a timeline for building the C$16.5 billion ($13.9 billion) Pathways Alliance carbon capture project in Alberta’s oil sands.

The shift in the US policy away from emissions reduction won’t be permanent, Hodgson said, but the sudden shift from the Biden administration’s policies, including the Inflation Reduction Act that promoted renewable energy projects, is damaging.

The Pathways project “buys incredible social license with all Canadians, but it really buys social license with people who want to buy energy around the world; whether it’s people in India, fastest growing user of energy in the world; whether it’s China, the biggest user of energy in the world; whether it’s Europe who’s desperately trying to diversify its resources,” he said.

Six of Canada’s largest oil sands producers are part of the Pathways project, which would take carbon produced from the oil sands and store it underground in northern Alberta.

The Canadian and Alberta governments are working hard to meet an April target to finalize details on a carbon capture plan and an increased industrial carbon price, but Hodgson signaled talks could go longer if needed.

“If something slips, look how the other side behaves,” he said. “If the other side says, you know what, we’re working in good faith, we’re committed to this, we’re going to get this done. And I think that’s the spirit we’re in right now.”