Oilsands Producers Hesitate as Regulatory Risks Persist

Three months have passed since Mark Carney and Danielle Smith unveiled plans for the West Coast Oil Pipeline (WCOP) and its accompanying carbon capture project, Pathways. However, Alberta’s oilsands producers remain hesitant to commit to the pipeline or clarify who will bear the long-term costs of Pathways.

The delays are not unexpected, according to Dennis McConaghy, a former executive at TC Energy. He identifies three major risks that Carney has failed to address: open-ended carbon taxes, decarbonization mandates on new oil production, and an unpredictable regulatory system that allows for post-approval challenges based on Indigenous consultations.

McConaghy questions Carney’s claims that Canada can become an energy superpower while these risks persist. He argues that Carney is stuck in a political impasse, unable to secure long-term trade benefits for Canada’s energy sector while avoiding concessions to the U.S. on protected industries.

The author suggests that Carney should immediately propose legislation to establish clear standards for Indigenous consultations under Section 35 of the Constitution. This could reduce uncertainty for project proponents and provide reasonable compensation for access to land.