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Posted 2025.12.15

Last updated 2026.07.03

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Canada's Projects in the National Interest - (an Econogics Series) © 2025

The Canada-Alberta Memorandum of Understanding signed November 27, 2025 (MOU)

The driver for posting this today is the announcement of the Canada-Alberta Memorandum of Understanding signed recently (2025.11.27) in Calgary by Prime Minister Mark Carney and Alberta Premier Danielle Smith.

While I have concerns about the MOU, some of which are laid out below, I'm addressing just a couple in depth in this post, notably the treatment of CCUS as some kind of climate change panacea, and not addressing the state of marine oil spill response, recovery and remediation in Canadian waters.

CCUS

It's time for someone to call shenanigans on the entire mythinformation propaganda smokescreen around Carbon Capture Utilization and Storage. For lack of others stepping up, I guess that's going to be me.
In particular, the closing phrase of the first paragraph:
"through innovation and intergovernmental cooperation, be a source of clean energy to lower global greenhouse gas (GHG) emissions.", and specifically naming CCUS as a key part of the solution for low carbon intensity oil and LNG.

The idea that Alberta is going to produce more oil and deliver it to market while lowering global greenhouse gas emissions is simply nonsensical to me. It's worse than a charade, it's simply false with disingenuous window dressing.

Speaking of charades, let's start with what those four words actually mean.

First word, Carbon. CCUS projects in the real world don't store carbon. They store carbon dioxide. At standard temperature and pressure (close to real world conditions on most of the surface of Planet Earth), carbon is a black solid. Carbon dioxide is an invisible gas. Different: black vs. transparent; solid vs. gas. Not a greenhouse gas vs. the predominant greenhouse gas. When something containing carbon is burned to produce CO₂, energy is produced (heat, light). Energy is consumed to break down CO₂ into oxygen and carbon. Let's stop pretending carbon and carbon dioxide are synonymous.

Second word, Capture. Capture means to take and have control over or to grasp. Though, in this case, it's more like retain. This carbon dioxide isn't free in the wild, or outside the control of the party doing the 'capturing'. That party is directly producing the carbon dioxide. It's like saying a farmer captures manure, when in fact, their operations produce it as a byproduct. A farmer can use manure as a soil amendment. Industry producing carbon dioxide can reuse it in making beer or soft drinks or dry ice or many other commercial applications.

Third word, Utilization. It means use. So this isn't about permanent storage; it's about using the carbon dioxide. In this case, for Enhanced Oil Recovery (EOR) - extending the life of an aging oil or gas field to produce more oil and gas, and MORE GHG emissions.

Fourth word, Storage. Pretty self-explanatory.

If you think the order of the wording is a bit strange, it's because the oil and gas industry corrupted the previous term - CCS for Carbon Capture and Sequestration - and hoped nobody would notice the change when they inserted the 'U' and changed what the S stood for.

Sequestration is not the same as Storage. Storage implies an intention to take the stored material out again, like a storage closet, or a storage unit. Sequestration means locking something up in a very permanent way, as a jury can be sequestered for the entire duration of a trial. In this case, we're thinking in terms of the duration of life forms on this planet which have evolved over a stable climate period of about 10,000 years - prior to the 1900s or as in for geological periods of time, like many millennia. Think eons, epochs. Not like, I'm going to store the milk in the fridge. More like, I'm going to sequester the carbon by making it into limestone and physically build a geologic era on it.

The original purpose of sequestering carbon dioxide (CO₂) was to remove the dominant greenhouse gas from the atmosphere to reduce planetary warming to a small degree on a very long-term basis.

The purpose of CCUS is to produce more oil and gas from aging wells facing depletion. This has always been the primary goal of CCUS; CO₂ just happened to be a waste product the fossil fuel industry was already producing, and by claiming to reduce GHG emissions by pumping it underground, they got taxpayer money to get rid of that specific pollution problem. The Weyburn-Midale Fact Sheet (Carbon Dioxide Capture and Storage Project) says: "CO2 injected at Weyburn and Midale totals 3 million tonnes per year" and "The CO2 injection is in 2 sites, Cenovus Energy owned Weyburn field and Apache owned Midale field. The EOR has increased production from Cenovus's Weyburn field by 16,000-28,000 barrels a day and by 2,300 to 5,800 barrels a day for Apache's Midale field."

Let's assume the typical values from that quote are 22,000 bpd from Weyburn and 4,000 bpd from Midale for a total of 26,000 bpd. Assuming 160 litres of hydrocarbon products are produced per barrel. For simplicity, let's assume it's all gasoline. For each litre of gasoline burned, 2.3 kg of CO₂ are produced just by the combustion process, along with some other pollutants and GHGs like nitrous-oxides. Re-working the math back up the chain, using (burning) that 26,000 bpd of oil results in 9,508,200 kg of CO₂ - per day - for decades of production.
(26,000 bpd x 159 litres gasoline/barrel x 2.3 kg CO₂/litre = 9,508,200 kg CO₂ or 9,508 tonnes or 9.508 kilotonnes PER DAY.
In a year, that's 3,470.42 kilotonnes, or about 3.5 megatonnes. Or about the same as the "3 million tonnes [megatonnes] per year" injected. The CO₂ produced from burning the additional oil produced (per the industry's numbers) will remain in the atmosphere for about a century.

That doesn't include the amount of injected CO₂ which returns to the surface in the produced oil, gas and produced water from the extraction operations, which doesn't appear to be measured.

It also doesn't include emissions via the pincushion effect.

It also doesn't include fugitive emissions from pipelines taking the CO₂ from the capture source to the depleted oil and gas fields where the injection is taking place, including interim storage, or emissions from the energy used to pump the CO₂ gas through the pressurized pipeline.

It also doesn't include the emissions from the energy used to pressurize the CO₂ gas into a liquid, and the energy used to pump the liquid into the oil field geological formation.

And yet, somehow, the politicians think this is a CO₂ REDUCTION measure, even though it's a net increase. (The fossil foolers know it isn't a GHG reduction mechanism; that's why they don't show this math in their grand statements about carbon capture.) An actual CO₂ reduction measure would be based on not burning stuff to make more CO₂, like shifting electric power generation off fossil fuels and substituting less expensive renewable energy plus storage as a robust, reliable, lower cost, and fast-to-deploy solution.

Since FutureGen, Carbon dioxide capture and sequestration has failed to live up to its billing.

It's long chain of CCS/CCUS projects since FutureGen - inevitably funded by taxpayers - to keep the fantasy alive that this time the industry will get it right, when the real objective is to delay effective greenhouse gas regulations and extract and sell more fossil fuels in the interim. As of December 2025, the latest instalment comes from Australia.
Carbon capture was spruiked as a way of limiting our emissions – but has Australia been greenwashed? (The Guardian)
"Despite billions in investment and backing from the [Australian] federal government, carbon capture and storage technology 'should be in no way treated as a climate solution', critics say"

Here are a couple of letters to THe Guardian that skip that math, but also conclude CCUS is a financial non-starter, and even bring up one of my hobby-horses: you have to count the methane emissions. (The Guardian 2026.07.17)

State of Marine Oil Spill Response in Canada

While the MOU appears to bring an end to the Tanker Moratorium for the northern BC Coast, it does not speak to requiring Alberta or the oil industry to implement a serious spill response capability or capacity for diluted bitumen spills which are likely to happen there if the additional Pacific port is located in that area. There is no point in building oil or gas pipelines to the coast unless you're planning to load the oil (dilbit) or gas (LNG) onto ships. That means tankers, and that means risk of spills.

The industry did put out a BOE puff piece titled "Oil tanker traffic surges but spills stay at zero after Trans Mountain Expansion" in the same time frame as the announcement of the MOU. In short, thank goodness for the profit motive of the international maritime shipping insurance industry (to avoid future massive oil spills for which it was being found increasing expensively liable), which started using double-walled oil tankers in 1990 as the tanker industry slowly scrapped its older tanker ships as they aged out. (Not a Canadian or oil production industry initiative; an insurance industry driven response.)

Despite the tone of the puff piece, doubled-hulled tankers are not a guarantee that spills will not occur.
Tanker Aegean Sea oil spill near the Spanish Galcian coast 1992 NTSB Report Eagle Otome Collision (NTSB)
MT Bunga Kelana 3 2010 accident and oil spill (Wikipedia)
How Do Major Spills Still Happen With Double Hull Tankers (Ship and Bunker 2018)
With a couple of minutes and a web search tool, you can find more.
A Review of Double Hull Tanker Oil Spill Prevention Considerations Prince William Sound RCAC (Nuka Research Report)
And if you really want to go through the looking glass and into the briar patch on the double-hulled spill reduction mythology, read Appendix D.2 of The Tankship Tromedy: The Impending Disasters in Tankers - Second Edition (2006)

However, the article completely ignored the failure of Canada's marine spill response regime to respond effectively to two refined oil product spills on the Canadian Pacific coast in recent years, because the incidents did not involve double-hulled oil tankers.

The MV Marathassa - a dry bulk carrier, not an oil tanker - spilled approximately 3,000 litres of bunker fuel into English Bay in April 2015. The spill site in English Bay is less than 10 km from the WCMRC base in Vancouver Harbour - the primary response organization for marine oil spills on the Canadian Pacific coast. Despite this, according to a lessons learned report on the spill, it took 14 hours for local emergency officials to be notified by the Coast Guard of the incident, and 6 DAYS for samples to be collected for official environmental monitoring. Spilled fuel was found on shorelines 12 km away from the spill site - and this was less than 3,000 litres of fuel spilled. Eventually a boom was deployed around the ship to contain the spilled fuel, but video showed that oil was getting past the boom, even in sheltered water. The actual oil spill response included volunteers and personnel in white Tyvek suits cleaning oil-stained rocks along the shorelines with paper towels.

In October 2016 the tug-barge Nathan E. Stewart ran aground while under tow, rupturing its containment and dumping more than 100,000 litres of diesel oil in Heiltsuk territory's waters.
Narwhal story (April 2017)
The Lingering Legacy of the Nathan E. Stewart Hakai Magazine (April 2017)
NTSB Report (November 2017)
The matter of response, oil recovery, remediation and compensation still have not been resolved (December 2025).
Frustrated with Canada’s spill response, Heiltsuk leaders take their fight international The Narwhal (March 2024)

Neither of these spills involved dilbit, which is expected to be harder to recover and remove as it is heavier than diesel and likely to sink within 1-2 days on water as the volatile diluent component boils off leaving the heavier asphalt-like material to sink with exposure time.

Concerns about response capability have been fuelled again recently (November 2025) with the near-sinking of an unidentified container barge near Bella Bella. The incident response system implememented since the Nathan E. Stewart incident doesn't seem to be satisfying the most directly affected parties - the coastal community closest to the near-sinking event.

No wonder Danielle Smith couldn't help herself from grinning from ear to ear while signing the MOU.

Oddly, the one positive takeaway I saw in this agreement for Canadians was 'Construction of thousands of megawatts of ... computing power, with a large portion dedicated to the sovereign cloud for Canda and its allies'. This measure of Canadian data sovereignty is a pressing issue, but it's unfortunate it has been tied to the dilbit pipeline albatross. It needs to addressed and funded as a priority project on its own, without strings attached.

An easy win that was missed is that those additional thousands of megawatts of electricity should have to come from green, renewable energy sources. Photovoltaics make electricity directly, as do wind turbines, and neither result in fuel bills for their entire operating life. Cheaper and faster to install than fossil fuel plants or nuclear fission. Backed up by energy storage, these clean energy sources can solve intermittency and provide reliable, continous, dispatchable power.

Further, there are things not called out in this MOU which do need attention.

Items for another day, but that need to be addressed:

Oil Spill Theatre Smithsonian Magazine (July 2016)

The oil industry in Canada still doesn't pay its bills despite continuing subsidies and making record profits.

The oil and gas industry in Canada still doesn't clean up its depleted wells, leaving landowners like farmers with polluted land and no compensation to pay for the required cleanups.

UPDATE: 2026.07.03 - It sucks to be pessimistic, cynical and correct.

Sure enough, we're finally getting the dirt on the real deal going down on Alberta's free lunch pipeline deal.

Remember way, way back in the olden days when Carney didn't have a majority in the House of Commons and committed when the MOU was signed, that any pipeline deal would require a private sector proponent and taxpayers would not pay for it?
No, well neither does Carney apparently, but that was the commitment.
Memorandum of understanding stresses that pipeline will be privately financed (CBC)

But the dog's breakfast served up yesterday positions the government of Alberta as the true proponent (using taxpayer money), with most of the pipeline route parked on the TMX right-of-way (owned by Canadian taxpayers), with Pembina Pipelines put as window dressing as the 'private sector investment', when in reality it's a vendor.

Unable to find a private company to back the pipeline, governments resort to 90% taxpayer ownership
"Today’s announcement breaks two promises that the federal and Alberta governments have repeatedly made to Canadians – that a pipeline would be privately financed and would be contingent on oilsands companies reducing their emissions"

Sadly, Premier Eby had to suck this up as the quid pro quo for the continuation of the BC north coast tanker moratorium, which should never have been part of this power play.

No improvements mentioned to oil spill response, e.g. making it rapid and effective and ending the oil industry shell game where they get to respond only to spills they choose, and suffer no regulation from the provincial or federal governments.

New hydro power in BC will be sent to LNG export terminals in preference to the BC residents that paid for the generation assets.

The Pathways carbon capture utilization and storage (CCUS) component is a pseudonym for Enhanced Oil Recovery (EOR), just like the Boundary Dam project it is likely copying. And like Boundary Dam, it will not work as advertised. (I have been banging this drum for a couple of decades based on the mechanics of the process. More recently, an acknowledged expert on the topic has reversed course on the CCUS fiasco, which was printed in the Globe and Mail on May 1, 2026 If you bother to read Martha Hall Findlay's piece, I would amend her leaky roof metaphor, and use the other $5,000 to invest in energy efficiency measures and to get off fossil fuels to reduce expenses and future supply issues before looking to solve the housing crisis with another single occupancy grey-market apartment. For a small example, here's a real story of doing that in our house - getting it off fossil fuels and saving on monthly future payments.)
The real proponent here is the government of Alberta, backed financially by all Canadian taxpayers under the rubric of 'a project in the national interest'. Like TMX, it won't pay off for Canadian taxpayers, despite the fancy accounting to hide that. It's another gift to the foreign owned bitumen producers operating the 'oil' sands.
The single advantage to Canadians is that it will permit wider market diversification for sales, further reducing the 4 million barrels a day currently shipped from Canada to the U.S. by Exxon (aka Imperial Oil for propaganda purposes in Canada) and the like.

This is happening with a cheap political posturing separation referendum as the backdrop. As there is no real private sector investor prepared to engage in this sham pipeline project, and Canadian taxpayers will be on the hook for the inevitable financial price of the coming failure and debacle, some groundrules are required. Let's remember, as best we can tell, this project will cost taxpayers over $40 billion. Yes, Billion with a B. If everything goes according to the current excuse for a plan, the first dilbit to be loaded onto a tanker at the new Pacific coast terminal will be in early 2037 - 10 years away. The decade forecast is a joke because neither the Alberta or Canadian governments have yet engaged the multiple First Nations who will have a very real say in how this goes.

Here's what has me pondering the most though. We know the 'Canadian' oil industry was lobbying the Carney government daily in numbers for weeks or months before the MPO was announced. They knew big funding was coming for 'projects in the national interest', and they intended to be first in line for their slices of the pies. Then, the announcement dribbles out from June 29 to July 3, and who isn't anywhere to be seen? The 'Canadian' oil industry. Now, as I figure it, these avaricious corporations didn't get to be the most profitable corporate sector on the planet by passing up on good deals. Why aren't they the proponents for this 'plan' (not yet worthy of the title 'project'). Why aren't they staking out their piece of the great investment that Danielle Smith and Mark Carney profess this will be (for Canadian taxpayers, the marks for the original TMX moneypit). I see two likely explanations:
1) the dilbit purveyors know the market won't be there in 10 years or more; or
2) they got this as another gift from Canadian taxpayers via captured governments, so they knew they wouldn't have to pay the tab themselve.

This bit of news showed up within a couple of days of the southern route dilbit pipe political deal:
Trans Mountain reaches toll settlement with oil shippers after prolonged negotiations
My guess is that the dilbit gang got the deal they wanted with the existing pipeline, with long-term pricing and capacity guarantees, and at least 300,000 barrels per day in headroom already being put in place, so they don't need the new pipe anymore. But the dilbit gang maneuvered Smith and Carney so hard, they needed the additional pipeline to drive their political storylines. None of the oil majors are doing major new bitumen extraction or upgrading projects now other than the Pathways CCUS circus and replacing production which is aging out, so where will the additional transportation demand for another 800,000 barrels per day come from a decade from now?

As a Canadian taxpayer, the first groundrule I want to set is not a nickel is to be spent by the federal government on this fiasco until after Alberta's citizens resoundingly state they are committed to staying in Canada, with no wiggle room, for at least 20 years if they want any Canadian government money of any kind spent on this. Not an airline ticket to attend a meeting; not an email response to start any kind of discussions; nothing that could be taken as a step forward on the path to squandering $1,000 per Canadian to ship a low quality product at least a decade from now to a market that likely will be shrinking, if not collapsing, by then.

Make no mistake, this 'investment' is never going to be paid back to Canadian taxpayers; it's never going to generate those kind of profits. Just as TMX today still doesn't make a net profit on operations sufficient to cover the interest on the construction debt (even if the federal government has shuffled a lot of that debt into a different ledger account to try to dress up the TMX numbers).

The second groundrule I want to set is that any discussion, design, drawing, interim agreements for this pipeline has to include the ability for the direction of flow to be reversed, and capable of transporting fresh water. This isn't a big deal, it means the interior of the pipeline has to be able to handle water, which is much less toxic, abrasive, and dangerous than the dilbit it is intended to carry; and some additional pumping stations will be required and some will have to be reversible. The same gear can be used to allow water to move through the pipeline during the winter. This pumping regime is already built into at least one of the TransMountain pipelines now (so that diluent could be pumped back to Hardisty). The dilbit pipelines are already constructed with heating and insulation to help the dilbit flow year-round.
This is an insurance policy, because 10 years from now, Alberta is going to want water even more than they want to ship out dilbit. The new terminal on the BC coast needs to be designed so that it can house desalination plants and transfer salt via freighter ships for possible export or to storage areas inland. Fortunately, desalination technology is advancing rapidly in the past few years, so the power required can come from renewable energy sources, potentially Site C generation or solar power from the BC interior like the Okanagan Valley (which could be installed in a way to reduce future wildfire risks), and power transmitted along the same TMX corridor.

End 2026.07.03 Update

UPDATE: 2026.07.14 - Other than clarifying this is a CCUS misadventure, not a sequestration project, I can't do better than The Energy Mix write-up. Do note that in Canadian practice, CCUS means MORE net GHG emissions, not less, due to the subsequent use for enhanced oil recovery. It's oily greenwash doublespeak.
‘Master Class in Greenwash’ as Ottawa, Alberta, Oil Sands Alliance Unveil CCS Deal (The Energy Mix 2026.07.13)
The Canadian Press article referenced in the above link (CP 2026.07.13).

For a deeper analysis, I recommend this article from the Canada's National Observer:
Feds lower carbon capture project targets and offer new subsidies as costs double (National Observer 2026.07.13)

Oops, the truth will out. Why aren't 'Canadian' 'oil' producers signing up as proponents for Smith & Carneyval's pipedream? Because they don't need the transport capacity. Remember, TMX is is not operating at capacity yet, and has announced it can increase capacity headroom for a fairly low cost with some technical tricks if the demand is there. The oilies realize that their real issue is more PRODUCTION capacity.
"If you don't get the production growth, you don't need the rest," Ebel said.
"And I think there's been a lot of focus on the pipes, and that's kinda ass-backwards."
Could not have said it better myself. And this fiasco is only going to cost Canadians $2,000 - EACH - before it's done.

End 2026.07.14 Update

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