Carney Ties West Coast Pipeline to 400-Km Pathways Project as Alberta Carbon Price Heads to C$130
Updated
Updated · The Globe and Mail · May 15
Carney Ties West Coast Pipeline to 400-Km Pathways Project as Alberta Carbon Price Heads to C$130
11 articles · Updated · The Globe and Mail · May 15
Mark Carney said Ottawa will back a new Alberta-to-West Coast oil pipeline only if the Pathways carbon-capture project proceeds, declaring: “No Pathways, no pipeline.”
The stance comes before Carney and Alberta Premier Danielle Smith unveil a carbon-pricing deal that would lift Alberta’s industrial levy to C$130 a tonne by 2040 from C$95.
That linkage is central to last year’s memorandum of understanding, which made federal pipeline support contingent on higher carbon pricing and emissions cuts from oil-sands producers.
Industry support has weakened as oil companies argue the levy hurts competitiveness; Cenovus estimated carbon capture costs about C$1.5 billion per megatonne, on top of operating and sustaining expenses.
Pathways would use a 400-km line to move captured CO2 to storage near Cold Lake and aims to cut emissions by 22 megatonnes a year, but analysts say delaying the C$130 price until 2040 makes the project less certain.
Will new tax credits make carbon capture profitable enough for oil companies to actually build the massive Pathways project?
Is this deal a climate solution or a massive subsidy designed to prolong the life of Canada's oil industry?
With fierce opposition from B.C. and First Nations, can Ottawa's 'grand bargain' actually succeed in building a new oil pipeline?
Canada-Alberta 2026 Energy Deal: $130/Tonne Carbon Price, New Pipeline, and CCS Gamble Reshape Climate Policy
Overview
On May 15, 2026, Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a major energy agreement that aims to balance Alberta’s push for expanded oil market access with the federal government’s climate goals. Central to the deal is Ottawa’s support for a proposed one-million-barrel-a-day crude oil pipeline to British Columbia’s northwest coast, with construction planned for fall 2027 and Alberta preparing a detailed proposal by July. In return, Alberta agreed to raise the carbon price on oil producers, targeting $130 per tonne by 2030, a cost considered minor for the industry. This agreement links energy development with stronger environmental commitments.