Separatists Boo Smith While the Clueless Bros Pitch a Pipeline
With so little logic behind the Carney-Smith agreement, the unasked question is whether anyone is sweating the details or knows what they’re doing. If they did this on purpose, that’s even worse.
It’s been three days since Prime Minister Mark Carney and Premier Danielle Smith announced their memorandum of understanding (MOU) on Alberta pipeline development. In that time, we’ve seen three years’ worth of analysis and conjecture, spin and substance, thoughts and feelings on all that we’ve just witnessed, with one legit popcorn moment.
Here’s the leading edge of what we’ve got so far.
• A memorandum of understanding that is short on detail, has no force of law, and puts expectations on third parties—Coastal First Nations, the province of British Columbia, climate experts in the House of Commons, and a very heavy lift for private investors—who weren’t in the conversation;
• Marquee appearances for a new pipeline and a carbon capture, utilization and storage (CCUS) megaproject that both look like distractions, rather than actual, viable projects—with refreshingly fast uptake on that assessment on the part of many pundits and a wide swath of daily media;
• The resignation of the federal Cabinet’s green conscience, Steven Guilbeault—a committed climate hawk and talented politician who is respected across most of the country and revered in much of his home province and constituency;
• A promise to “ramp up” Alberta’s industrial carbon price to $130 per tonne, still less than the federal benchmark of $170 by 2030—a cornerstone of the deal that depends on Smith keeping her word and was immediately walked back in an online post by her chief of staff Rob Anderson (his very professional and diplomatic social media handle: FreeAlbertaRob);
• A five-year delay and a less ambitious target for regulating methane, a climate super-pollutant with 84 times the warming potential of carbon dioxide over a 20-year span—a “no-brainer” policy option cited by the Intergovernmental Panel on Climate Change as one of the quickest, cheapest ways to get the deepest emission reductions by 2030, but that Alberta has already undermined;
• An undignified and ill-deserved end for the federal government’s watered-down, long-delayed cap on oil and gas emissions, which wasn’t to take effect until 2030-2032—by which time the decline in global oil and gas markets might well be far enough advanced to represent the production cap that Alberta has resisted for so long;
• A carveout on the federal government’s much-diminished Clean Electricity Regulations that will lose a few hundred million tonnes of greenhouse gas emission reductions that could only be achieved by an industrial carbon price if it hit $400 or $500 per tonne, and is already, predictably, triggering demands for similar sweetheart deals with other provinces that will complete a race to the bottom on electricity emissions;
• Big, aspirational commitments on big tech bets like artificial intelligence, data centres, and nuclear power, with Carney making several references to securing Alberta’s next industrial transformation;
• No reference at all to lifting the punishing and arbitrary moratorium on renewable energy development that represent Smith’s best effort smother that transformation in the cradle.
Still Not Enough for Alberta’s Homegrown Radicals
And yet, as anyone could have predicted, the radical separatists who make up a very small percentage of the Alberta population but about 65% of Smith’s political base still aren’t satisfied.
“On Friday evening, the premier drew loud boos when she mentioned the agreement she signed Thursday,” reported Calgary Herald columnist Don Braid. “She looked stricken.”
Time to stock up on popcorn and watch the show. We’re buying.
But notwithstanding (there’s that word again) the senseless but predictable pushback from never-satisfied separatists, the MOU looks like a big, daunting, destructive carbon bomb, brought to you by the former central banker who’s widely recognized as the most “climate-literate” prime minister the country has ever seen. By one of the handful of world leaders who’ve been most deeply knowledgeable and committed on the climate crisis.
Except that, when you look more closely, when you connect the elements of this deal to what we already know in the real world, the MOU looks less like a plan of action and more like really bad political theatre—the kind of theatre that leaves you walking out before the intermission and demanding a refund. When the sun rose Friday morning, these things were still true.
Coastal First Nations in B.C. haven’t assented to a new pipeline that would endanger their territorial waters, and there’s no indication that they will. If this deal went ahead, the ensuing court battles would tie it up for years.
No investors have expressed interest in the pipeline, and Alberta oil sands companies have spent years dodging questions about why they won’t invest their own obscenely high profits in the carbon capture projects they insist they want.
Global oil and gas demand is still projected to peak this decade before going into a permanent decline, despite the Trump administration’s best/worst efforts to arm-twist the International Energy Agency into fudging the numbers.
Speculation is still mounting that the AI bubble is about to burst, with at best unpredictable implications for electricity demand, and so-called advanced nuclear technologies are as speculative today as they were months and years ago.
So Why an MOU?
Those mostly self-evident, easy-to-track realities leave us with a whole new set of questions.
• Why did Carney seemingly capitulate to Smith, handing her apparent wins on seven of the nine demands she nailed to his door as he arrived in the Prime Minister’s Office?
• What game does the PM think he’s playing, and how does he expect it to end?
• Did anyone in Carney’s office, or for that matter in Smith’s, give any part of this deal the slightest reality check? Or was that beside the point, when Carney’s Job 1 is to unite the country against Trump, and Smith’s was to unite her fringe-inducing United Conservative Party before this week’s UCP convention ahead of a rumoured early provincial election?
• What will it take to get any of these projects off the ground in the real world, and how does Carney expect to line up the legal and financial backing to make them happen?
• How much more and better could Team Carney have done by focusing on nation-building projects that actually build the nation, rather than driving us farther apart?
You clicked through to The Weekender to read a reasonably short opinion column, not a full-length novel. (We really do get that.) So think of this list as the opening lines of the more detailed news and analysis you’ll see us pursuing in the weeks and months ahead.
But first, as they say in the biz, the headlines.
“Is This True?”
Three words from Carney’s chief of staff, Marc-André Blanchard, tell you more than we wanted to know about how the PMO brain trust built this deal.
In a gripping account of the events leading up to Guilbeault’s resignation, the Toronto Star’s Althia Raj documents a meeting last Tuesday afternoon, less than 48 hours before Carney’s and Smith’s smiling photo op, where Guilbeault finally got a look at the MOU’s contents.
Pause for just a moment on what happened here. In the quintessentially Honourable Member for Laurier—Sainte-Marie, the clueless bros in the Prime Minister’s Office had access to some of the best, encyclopedic climate and energy expertise on the planet, a lifelong environmental advocate and policy wonk and one of the few people in the world who’ve endured attended all 30 United Nations climate conferences, all the way back to COP1.
And yet, by accident or by design, they froze Guilbeault out of (what passed for) their strategizing until it was too late for him to have a voice in the deal, when they no doubt had him available on speed dial and anxious to be briefed.
This was after Energy and Natural Resources Minister Tim Hodgson told a meeting of B.C. Liberal MPs they were being “naïve” and “ideological” by raising concerns about the pipeline. Before we start throwing around adjectives and one-liners we might regret—like suggesting a government can build trust with First Nations over a Zoom call after refusing to meet with them in person—remind me who in that room was forgetting that Carney’s minority government holds 20 seats in B.C. and just two in Alberta?
Raj recounts the moment when Guilbeault asked a small gaggle of Carney’s top advisors why they had negotiated away the Clean Electricity Regulations, “sacrificing a few hundred million tonnes of greenhouse gas emission reductions, reductions that couldn’t be achieved without the industrial carbon price reaching $400 to $500 per tonne.”
“Is this true?” Blanchard reportedly asked, demonstrating in an instant how poorly he’d read in on the file and how easily federal negotiators had been snookered by Smith and her team. Raj says Deputy Privy Council Clerk Chris Fox confirmed that an industrial carbon price would reach equivalency with the regulations at about $400 per tonne but then “took on an aggressive tone, defending the agreement as necessary for Canadian unity and to combat separatism in Alberta.”
Now we’re hearing the first rumblings of another kind of separatism that might soon be keeping Blanchard and Fox up at night.
“My (pipe-line) dream would be for at least 12 members of the Liberal climate caucus to form a new temporary party of ‘Ex-Liberals’ who can then prove to be the balance of power and carry far more weight in Parliament, perhaps pushing Carney to get back to sanity,” Canada’s Clean50 founder Gavin Pitchford writes in his weekly newsletter. “As it stands now they need to support his actions or suffer consequences. If 12 go, the ‘new’ group would retain official party status and get the same public funding they get now.”
With some 50 Liberal MPs reportedly taking part in the climate caucus, Pitchford added, “one can dream…”
A Pipeline with Carbon Capture…Really?
Even if they had clear sailing (so to speak) politically, what possessed Carney or his advisors to imagine that a new pipeline to the northwest coast will ever be built, that westbound tanker traffic out of northwestern B.C. is in any way realistic, or that carbon capture technology will be affordable or ready to scale over the life of this MOU?
“Pipelines and CCUS,” Dave Sawyer, principal economist at the Canadian Climate Institute, wrote on LinkedIn. “These two have been Canada’s high-drama friends that suck the oxygen out of the room. And now they are inseparable roommates. Seems fitting.”
“How each one is apparently a prerequisite to the other is one of the funniest things I’ve read in a while,” replied Martin Olszynski, associate professor and chair in energy, resources and sustainability at the University of Calgary. ”Tell me you’re a non-binding document without saying you’re a non-binding document.”
But on the off-chance that Carney & Co. are actually serious about re-enacting the last decade’s fight over the Northern Gateway pipeline, they really should have thought it over twice. Or even once.
We already know that a new pipeline would be a carbon bomb and a disaster for the coastal waters off northwest B.C., and that CCUS is still an unproven technology (by the industry’s own admission) that would need permanent subsidies to break even.
But here are three other deal-breakers for any new pipeline that haven’t made it into the first couple of days of headlines, but are each significant enough to stop the project in its tracks.
• The MOU touts decades of future oil demand in Asia that won’t materialize—not now, not ever.
“A hard truth: Ottawa cannot name a single potential long-term customer for Alberta’s ultra-heavy sour crude and back it up with data. Not one,” writes our friend Markham Hislop at Energi Media, in an excellent long read on the looming collapse of global oil demand. “The MOU imagines a market that no longer exists—a world where Asian refiners are eagerly lining up to process the world’s highest-carbon heavy crude that costs $15 to $20 per barrel just to get to market.”
Hislop adds: “If that world isn’t long gone, it soon will be.”
• Any investors who are paying attention will be running, not walking, to get as far from this deal as they can.
Earlier this month, the UK-based Carbon Tracker think tank warned that investors in Canadian oil and gas will face serious financial risk—and provincial revenues from the industry could fall 82%—as the global energy transition unfolds through the 2030s. “In a Paris-aligned, fast-paced transition scenario where [oil] prices fall to $30 per barrel, around 30% of the sector’s total value is at risk if the sector maintains business-as-usual investment behaviour,” the think tank wrote.
“Canadian oil and gas expansion is increasingly a high-risk, low-reward strategy,” said Carbon Tracker Analyst Olivia Bisel. “Investors and policy-makers should be cautious: the long-term risk profile of Canadian portfolios is deteriorating. Capital allocation decisions and public policy need to reflect this reality.”
• The ban on tanker traffic on B.C.’s northwest coast has been in effect for more than 50 years. It’s been there for a reason, and it’ll be a grievous mistake if the federal government lifts or modifies it. But that doesn’t mean any shipping will take place.
This quote comes from an unattributed post on social media, but it’s a line of argument that you can expect to see advocates track down and verify in the days ahead:
The conversation around crude tankers on the northern British Columbia coast often focuses on engineering “possibilities”—dredging, offshore loading buoys, modern propulsion, or partial loads—but none of those determine whether crude shipping happens. Marine insurers and operators do. Tanker operations are governed by a brutally simple rule: If a full-failure scenario is not survivable, the voyage is not insurable. And if a voyage is not insurable, it doesn’t matter whether it’s technically “possible”—it will never operate commercially.
The Hecate Strait/Dixon Entrance/Davis shelf system fails that survivability test. A fully loaded crude tanker transiting this region must cross a highly unstable continental shelf interface where deep Pacific swell rises rapidly into short, steep breaking seas. In a winter storm, a ship that loses propulsion or steering has no refuge, no deep-water anchorage, no weather escape option, and no time buffer before drifting into shoals. That’s what insurers look at —not whether a port could theoretically be expanded or whether tankers have dynamic positioning systems.
None of this changes what pipeline opponents will have to do next. Indigenous peoples and their community allies are gearing up for the fight. That unexplained whirring you’ve been hearing is no doubt the sound of legal machinery kicking into gear. But apart from the legitimate grief and outrage that have been ricocheting through social media since Thursday, what a colossal waste of time and attention, when time is the one thing we dare not waste if we’re serious about confronting climate change?
Yes, The Neighbours Are Watching
The grain of truth that gives the MOU a logical thread—not any kind of rhyme or reason, but at least a rationale we can follow—is the one that Chris Fox reportedly laid out for Guilbeault. Carney was elected with one job, one job: to protect Canada from Trump’s 51st state threats. And even though there are many better ways to get that done, I can understand without agreeing if the PMO thought this deal was the best or the only way to manage Smith as a separatist threat and a potential fifth column for annexation.
How else to explain Carney telling Smith to “hold it up like Trump does,” before they both hoisted their signed copies of the MOU for the photo op? For the audience of one that moment was meant to reach, they might as well have livestreamed the signing on Fox “News”.
On the balance of probabilities, Carney and his team were probably right that the neighbours were watching. But thankfully, Trump isn’t the only neighbour on the block (just the one where the lights are out, no one’s home, and they never take out the trash or pay the bills). Carney knows that as well as anyone—he’s the one who’s been promising to diversify our economy and bring in $1 trillion in new investment over next five years to lessen our dependence on the United States.
In his latest newsletter, independent journalist Tod Maffin reports that the strategy may be starting to work. In the latest edition of the influential Anholt Nation Brands Index, a survey of more than 40,000 adults across 20 countries, “the United States did something no country has ever done since this index started 19 years ago,” Maffin writes: “They fell out of the top 10. They did not slip. They collapsed.”
And “according to the report [pdf], the chief beneficiary was Canada. We went from sixth to third,” Maffin adds. “People around the world said our stance against Trump makes them trust us more.”
Those other countries and regions are still working to reduce their emissions and seize the cost savings and energy security gains in shifting from fossil fuels to electricity—in spite of Trump, and maybe sometimes because of him. Those countries surely won’t want to see us asserting our sovereignty through a sham agreement with a radical fringe separatist movement, in aid of foreign-owned oil sands giants working to fry the planet while they send 60% of their profits to U.S. shareholders.
The MOU is still new, and it contains more than enough ambiguity that the details will take time to settle. While that happens, Energi Media’s Markham Hislop has some sage advice on how campaigners and all the rest of us should filter and react to the story, if we aren’t already:
The world is no longer debating whether an energy transition is happening. It is happening. Every major international model now acknowledges it. Capital markets have shifted. Technology costs have collapsed. Automakers are pivoting. Utilities are moving decisively toward lowest-cost renewable energy systems.
What matters now is the shape and speed of that transition. Environmental and climate groups [I would add—not all, but some groups—MB] have not adjusted their arguments to reflect this new reality:
• They talk about emissions, but not electrification.
• They talk about Paris, but not transportation emissions standards.
• They talk about moral failure, but not market failure.
• They talk about stopping pipelines, but not restructuring Alberta’s economy.
Their responses feel frozen in amber—moralistic, reactive, and disconnected from the granular economics of transition. Environmental politics needs evolution, not repetition. The MOU deserved critique rooted in technological change and market analysis.
Instead, it received another round of 2015 talking points.
We’ll all be hearing, saying, and writing a lot more on this before we’re done, so story to be continued…
Mitchell Beer traces his background in renewable energy and energy efficiency back to 1977, in climate change to 1997. Now he and the rest of the Energy Mix team scan 1,200 news headlines a week to pull together The Energy Mix, The Energy Mix Weekender, and our weekly feature digests, Cities & Communities and Heat & Power.
Chart of the Week
Guilbeault Resigns as Smith Declares Crushing Victory
‘Empty Deal’ at COP30 as Petrostates Block Progress on Fossil Fuel Phaseout
B.C.’s LNG Push Could Erase Its Climate Gains, Review Warns
West Coast Pipeline to Receive ‘Political Support’ from Carney Deal with Alberta
Dispatches from Belém: An Emotional End to a Dramatic COP30
Oil Tanker Ban Just One Obstacle to Northern B.C. Pipeline, Experts Say
B.C. ‘Has to Agree’ on Alberta Pipeline Plan: Carney
UAE to invest up to US$50B in Canada in industries such as AI, energy (Reuters)
Trump’s anti-climate agenda could result in 1.3M more deaths globally, analysis finds (The Guardian)
Brad Lander Recommends New York Pension Funds Ditch BlackRock (Bloomberg)
Vianode to build $3.2-billion graphite plant for EVs in southwestern Ontario (Toronto Star)
Oil Prices Slip as Peace Talks Advance (Bloomberg)
Brookfield inks hydro contract with Microsoft in latest Big Tech deal (Canary Media)
Why a transit megaproject in Montreal should be a model for Canada (Globe and Mail)
Thanks, Kevin. "How about providing context..." Sure, but this is already a 3,000-word post! And somewhere along the way, I promised it wouldn't be a full-length novel.
But we've been covering the issues you raise, extensively, for 11 1/2 years. You can find an indexed archive on our main news site, https://theenergymix.com.
The one point I'll reply on here is that Markham Hislop's work is based on evidence, not opinion -- that's why we cite him. (Markham, if you're reading, please chime in.) Sure, you can find energy futures modelling that shows oil and gas demand increasing through 2050 if you want to believe that Exxon or OPEC will publish evidence-based modelling. (Even if they're following the real story in-house...I hope and expect that they are.)
But some of the coverage on our site might help you sort through this idea that it'll take many decades for the energy transition to run its course. The shift is still a work in progress, but it's been accelerating like mad, particularly over the last five to 10 years -- which is why you'll see credible (as opposed to self-interested) modelling sources like the International Energy Agency projecting a fossil fuel peak in the next few years, followed by decline. And contrary to the propaganda you can see on any bus shelter these days, dirty and expensive Canadian heavy oil will be one of the first to fall out of the global market, not one of the last.
There's also more immediate evidence -- projections of low oil prices over the next six years or so that will inhibit new investment; the LNG industry already stuck in a massive supply glut that was expected to hit sometime next year; investors abandoning fossil fuels in favour of clean electricity; and the fossil industry itself expressing zero confidence in its own future production by diverting all its resources out of exploration and development in favour of stock dividends and buybacks.
TBH, one of my biggest worries in all of this (by no means the only worry, but still an important one) is that communities in Alberta, Saskatchewan, northeastern B.C., and Newfoundland won't get the information they need, in enough detail and soon enough, to reach their own conclusions on these trends and decide how to react. The solutions and opportunities are practical, affordable, ready for prime time, and already starting to scale up -- but people won't be able to embrace them in time if they're being fed the line that the energy transition will take decades to play out.
It's conversations like this one that can help bridge the gap.... (So please, let's keep it going if you'd like to.)
That is *such* a darn good point!