Trudeau’s resignation could derail major carbon capture project: experts

The future of Canada’s largest proposed carbon capture and storage initiative faces increasing uncertainty following Prime Minister Justin Trudeau's resignation, adding to existing doubts about the direction of the country’s energy and climate policies. Experts believe the current political environment could further delay or jeopardize the project.

Overview of the Project

The $16.5-billion initiative, proposed by the Pathways Alliance—a coalition of major energy companies—aims to reduce carbon dioxide emissions from over 20 oilsands facilities. The captured emissions would be transported via a 400-kilometer pipeline to an underground storage hub near Cold Lake, Alberta. If completed, it would rank among the world’s largest carbon capture and storage projects.

Despite being announced in 2022, the final investment decision has not been made, with the project hinging on federal and provincial support. The coalition has since engaged in significant lobbying efforts to secure backing.

Challenges Amid Political Uncertainty

Experts suggest the ongoing political turmoil, combined with the likelihood of a federal election, casts doubt on the project’s feasibility. Michael Bernstein, executive director of Clean Prosperity, remarked, "I can’t imagine a huge project like that could really move forward in a time like right now. When you’re looking at a project with at least a 15-year time horizon, you want as much certainty as possible."

Heather Exner-Pirot, an energy advisor, highlighted concerns that a potential change in government might lead to reduced financial support. While the current administration has incentivized such projects through tax credits and carbon pricing mechanisms, the opposition’s stance on industrial carbon policies remains unclear. "It doesn’t sound, from everything they [the opposition] have been saying, like they would support what you would need to do to get Pathways Alliance over the hump," she said.

Business Perspectives

The oil industry has emphasized that carbon capture is prohibitively expensive without substantial government backing. Although many companies are committed to decarbonization, political and economic uncertainty complicates decision-making. Scott Crockatt from the Business Council of Alberta explained that businesses see value in decarbonization for long-term risk reduction but acknowledged the challenges posed by current conditions.

Andrew Botterill of Deloitte Canada noted that companies are seeking stability before committing to such significant investments. "When they see things on the horizon that are uncertain, I think it slows the big capital spends," he said.

Timeline and Prospects

The federal emissions reduction plan calls for significant expansion of carbon capture capacity by 2030, aligning with Canada’s goals to cut emissions by 40–45% below 2005 levels by 2030 and achieve net-zero by 2050. However, experts like Bernstein are skeptical of meeting these targets, given the project delays. "These projects take the better part of a decade to complete, and we just don’t have that time available," he said.

Bernstein also emphasized the need for cooperation among the companies, Alberta, and the federal government to advance the initiative. However, he observed, "What we know at this point right now is there is no deal that works for all the parties."

Conclusion

The Pathways Alliance project represents a cornerstone of Canada’s strategy to address emissions from the oilsands. However, its future depends on political clarity and coordinated action, both of which remain elusive.