The government of Alberta, Ottawa, and five oil majors have agreed to advance the Pathways Project, a condition for constructing a 1,200km oil pipeline to facilitate tanker export to Asian markets.

The pipeline will transport oil from Alberta to the southwest coast of British Columbia and the multibillion-dollar Pathways Project will serve to offset some of the resulting carbon dioxide emissions. As part of the quid pro quo agreement, the governments will pursue regulatory and fiscal policies designed to support oilsands production growth, ensuring the pipeline can be filled.

According to an article published by CBC Edmonton, the Canadian federal government has committed to extending investment tax credits of 50 per cent on eligible carbon capture equipment and 37.5 per cent for associated transportation, storage and use equipment. Those rates, now valid until 2035, were previously to have been in effect until 2030. Ottawa will also introduce legislation enabling investment tax credits for enhanced oil recovery, which involves injecting carbon dioxide into mature oil fields to boost production.

For its part, Alberta has committed to finalising its own incentive program for carbon capture and to implementing financial supports to encourage the oil production growth required to underpin the new West Coast oil pipeline and expansions planned for other pipelines. The agreement also includes incentives for the companies under Alberta’s carbon pricing regime if they meet certain milestones.

The Pathways Project will proceed in stages, with infrastructure in service by Jan. 1, 2032, and the project completed three years later. In its own communications, the Canadian government calls the Pathways Project one of the world’s largest of its kind and says six million tonnes (net) of emissions per year will be captured and stored by 2035.

The members of the consortium behind the Pathways Project are Canadian Natural Resources, Imperial Oil, Suncor, Cenovus Energy, and ConocoPhillips, collectively known as the Oil Sands Alliance.