Canadian Prime Minister Mark Carney and Alberta Premier Danielle Smith took a major step Friday toward advancing a new oil pipeline project that could significantly expand the country’s crude exports to Asian markets.
Expanding overseas energy exports has emerged as a key part of Carney's strategy to reduce Canada's economic reliance on the United States, but plans for a new pipeline are facing stiff resistance over environmental concerns.
Alberta's conservative Premier Danielle Smith was a relentless critic of Carney's climate-focused predecessor, Justin Trudeau, accusing him of suffocating the province's oil industry, but she has sought to work with Carney.
Carney and Smith cleared a key hurdle toward a new pipeline on Friday by signing a deal on industrial carbon pricing, a system that extracts a fee from large-scale CO2 emitters.
Oil companies have been critical of the system, but Smith said Friday that the prohibitive rates set under Trudeau's government had been "rolled back."
Ottawa and the provincial government agreed that the rate would gradually rise to a fee of CAN$130 ($96) per tonne of CO2 emitted by 2040. Trudeau had called for a rate of CAN$170 by 2030.
At the announcement in Calgary, Carney said a final proposal for a pipeline that will serve Asian markets should be submitted to his major projects office by July 1.
He said Canada had earned "the trust of Asian countries who want our energy because they know that we are a safe, stable, reliable partner in a world that is anything but."
Carney has repeatedly warned that the trade hostility ushered in by President Donald Trump is not a passing phase and Canada needs to plan for a fundamentally different economic relationship with the U.S., including by broadening ties with Asia.
Pipeline approval is also contingent on developing what Carney called "the largest global initiative for carbon capture and storage."
Some Indigenous groups and First Nations have said they will oppose any pipeline that runs from Alberta to Canada's Pacific Coast.
The leader of the left-wing New Democratic Party, Avi Lewis, charged that Friday's announcement "marks the Carney government's official surrender to the oil and gas lobby."
The announcement also comes at a fraught political moment.
Alberta separatists have built record-high support of roughly 30% for independence by railing against Ottawa's control over the provincial oil industry.
Carney, who was raised in Alberta, insists the province can thrive within a united Canada.
