Political uncertainty could derail major carbon capture project, experts

The fate of Canada’s largest proposed carbon capture and storage project is even more uncertain after Prime Minister Justin Trudeau’s resignation announcement this week amplified existing unknowns around the future of energy and climate policy in Canada, experts say.

The $16.5-billion high-profile project in question would capture harmful carbon dioxide emissions from the oilsands, Canada’s heaviest-emitting sector.

It would be built by the Pathways Alliance, a consortium whose members include some of Canada’s largest energy companies.

But industry watchers say the project’s future is cloudy due to current political turmoil and the likelihood that a new federal government will be elected this year.

“I can’t imagine a huge project like that could really move forward in a time like right now,” said Michael Bernstein, executive director of the non-profit group Clean Prosperity.

“When you’re looking at a project that has at least a 15-year time horizon, you want as much certainty as possible. And there’s just more uncertainty than I can remember in my whole time doing this work right now.”

The Pathways Alliance is made up of six oilsands companies that have jointly committed to achieving net-zero greenhouse gas emissions from oilsands production by 2050.

Their proposed project, the centrepiece of that commitment, would capture carbon dioxide emissions from more than 20 oilsands facilities in northern Alberta and transport them 400 kilometres away by pipeline to a terminal in the Cold Lake area, where they would be stored in an underground hub to prevent them from entering the atmosphere.

The project would be one of the largest carbon capture and storage projects in the world, if it came to fruition. But while the companies first proposed the joint project in 2022, they have not yet made the final investment decision required to proceed.

Pathways has spent much of the time since then lobbying for federal and provincial support.

A spokeswoman for the Pathways Alliance declined to comment Monday when asked about the current Canadian political situation.

Scott Crockatt — spokesperson for the Business Council of Alberta, a group whose membership includes major oilsands companies — said while an extended period of political uncertainty poses challenges for businesses overall, the Alberta companies that have proposed decarbonization projects in recent years remain committed to that goal.

“Most businesses who were looking at decarbonization projects and other types of sustainability projects were doing it for sincere business reasons, like generating value and reducing long-term risk,” Crockatt said.

“So I actually don’t think that underlying motivation is going to change with political cycles.”

But the oil industry has also repeatedly said that investing in carbon capture, which remains a hugely expensive technology, cannot happen without significant levels of government support.

The federal Liberal government, which has publicly called on the oil industry to move…