CALGARY – Federal climate policy will have to be finessed in just the right way if Alberta’s push for a “grand bargain” on a new West Coast oilsands pipeline is to pan out, a former energy executive said after The Globe and Mail reported the province and Ottawa were nearing an agreement in support of such a project.
“The devil is in the details and there will still be a lot of questions about how do we trust a Liberal government,” said Dennis McConaghy, who retired more than a decade ago from TransCanada Corp. — now TC Energy Corp. — after working on development of the original Keystone pipeline to the U.S. and the early stages of the defunct cross-Canada Energy East proposal.
Federal insiders told the Globe that on the table are an easing of a B.C. north coast tanker ban, strengthened industrial carbon pricing to bolster the economics of carbon capture and forgoing a planned emissions cap that industry has said is a de facto production cap.
“On the face, this is more than I expected,” McConaghy said. “I’m still skeptical they get to the finish line.”
The Alberta government has announced plans to spearhead a proposal for an Alberta-to-B.C. pipeline that could carry up to a million barrels of oilsands crude per day for export to Asian markets. It aims to make a submission to Ottawa’s new Major Projects Office in the spring for a speedy review.
Premier Danielle Smith has said the province is stepping in because no private sector player is willing to invest in a project as long as the tanker ban and several federal environmental policies remained in play.
McConaghy said an industry-led pipeline will only go ahead if oilsands producers are willing to ramp up production enough to fill it.
“They will only do that if they think there’s a fundamental ability to trust the federal government that the kind of energy and climate policy it faces is not going to be at odds with actually producing another million barrels,” he said.
The federal industrial carbon price can’t be so high that new oilsands developments aren’t viable, McConaghy added, but it must be high enough to make the economics of the Pathways Alliance carbon capture project work.
Pathways would capture emissions from the oilsands and store them underground so they don’t enter the atmosphere. Its partners have not made a final investment decision and federal and provincial support remains a question mark for the $16.5-billion project.
Prime Minister Mark Carney and Alberta Premier Danielle Smith have said an oil pipeline could be approved in conjunction with Pathways as part of a “grand bargain.”
Janetta McKenzie, director of the oil and gas program at the Pembina Institute, said talk of bolstering the industrial carbon price is encouraging, but she wants more detail.
“There’s still a lot that’s very nebulous about this pipeline — exactly where it’s going, who is involved in deciding the route, who has been consulted and how are these emissions impacts going to be squared,” she said.
A recent analysis by the clean energy think tank found a new West Coast oilsands pipeline would enable more emissions than Pathways would offset.
“That really underpins the need for strong industrial carbon pricing, which can incentivize emissions reductions beyond Pathways,” McKenzie said, adding the carbon price would need to become more stringent over time.
Liz McDowell, senior campaigns director at Stand.Earth, said opposition to an oil export pipeline through B.C. will make protests against contentious projects like the Trans Mountain expansion and the defunct Keystone XL expansion “look like a kids birthday party.”
“Every climate and social justice civil society organization on these lands, and beyond, will be tireless and dogged in our resistance,” she said.
McDowell added that Carney has “undone a decade of climate progress” within months, dragging Canada back to where it was when Stephen Harper was prime minister.
“This short-sighted focus on expanding oil and gas is only going to hurt Canadians,” she said.
“While other countries are making unprecedented leaps in renewable energy production, Canada’s stuck in the past — and we’re going to get left behind.”
This report by The Canadian Press was first published Nov. 19, 2025.