Greenhouse gas emissions from Canada’s oilsands sector are expected to rise substantially over the coming years, even if the Pathways Project proceeds as planned, according to environmental economist Dave Sawyer of the Canadian Climate Institute.
Sawyer said the emissions generated by increased oilsands production enabled by a proposed new West Coast pipeline would far exceed the reductions anticipated through the carbon capture and storage project.
The Canadian Climate Institute estimates that the additional pipeline capacity would result in approximately 20 megatonnes of new greenhouse gas emissions per year from the oilsands sector.
By comparison, the Pathways Project is currently expected to capture and permanently store six megatonnes of carbon dioxide annually beginning in 2035, with a further 10-megatonne annual reduction targeted by 2045 through carbon capture and storage or other emissions-reduction technologies.
The revised targets are considerably lower than the project’s earlier objective of storing 22 megatonnes of CO₂ per year by 2030.
According to Sawyer, these updated ambitions could still leave Canada facing a significant increase in emissions. He also argued that changes made earlier this year to Alberta’s industrial carbon pricing system did not significantly improve the economic incentives needed to encourage greater private investment in emissions-reduction technologies.
Federal data shows that oilsands and thermal heavy oil production generated 92 million tonnes of CO₂ emissions in 2024, according to Canada’s latest national greenhouse gas inventory.
The debate comes as the Alberta and federal governments continue advancing both the proposed carbon capture project and a new West Coast oil pipeline.
Late last year, the two governments signed a broad energy agreement that linked the two initiatives, making construction of the new pipeline conditional on the development of the Pathways Project, while also tying the carbon capture project to the pipeline’s advancement.
Earlier this month, Alberta formally submitted its proposal for the new pipeline to the federal Major Projects Office, which was established to accelerate nationally significant infrastructure developments.
On the same day, government officials signed a non-binding memorandum of understanding with the companies behind the Pathways Project outlining the next steps for the initiative. The memorandum was released publicly on Monday.
Sawyer said the agreement largely confirms that the project is moving ahead but also reflects a considerably smaller emissions-reduction target than originally proposed.
The Pathways Project is backed by Canada’s five largest oilsands producers: Cenovus Energy, Imperial Oil, Suncor Energy, Canadian Natural Resources, and ConocoPhillips.
The project would involve building a network of pipelines to transport captured carbon dioxide from multiple oilsands facilities in northern Alberta to a permanent underground storage hub near Cold Lake, Alberta, with each participating company responsible for capturing emissions from its own operations.
The proposed one-million-barrel-per-day West Coast pipeline would be developed, constructed and operated by the federal Crown corporation Trans Mountain Corporation, which is also overseeing the expansion of its existing pipeline serving the Vancouver region.
The federal and Alberta governments have so far indicated they will pay 90% of the project costs, with Alberta estimating the pipeline could cost as much as $43.7 billion.
The carbon capture project is also expected to be heavily dependent on public funds.
Originally estimated to cost $16.5 billion in 2022, the project is now expected to require between $20 billion and $30 billion, according to comments made last month by the CEO of Cenovus Energy.
Sawyer described carbon capture, utilization and storage (CCUS) as a technology that still faces significant commercial and technical uncertainty, noting that its limited deployment reflects ongoing challenges around cost and scalability.
Although he believes stronger industrial carbon pricing would be a more effective way to reduce oilsands emissions, Sawyer argued that governments have removed many of the available policy tools. In the absence of more robust alternatives, he said the Pathways Project remains a worthwhile effort to help curb emissions from the sector.
The federal government currently offers investment tax credits for carbon capture projects and has committed to supporting operating costs through several financial mechanisms, including potential updates to the Clean Fuel Regulations.
Alberta is also working to finalize its own carbon capture incentive program while committing additional financial support intended to encourage the production growth needed to underpin both the proposed West Coast pipeline and future pipeline expansions.
However, the project continues to face opposition from some local stakeholders.
The advocacy group No CO2 Pipelines Alberta, which represents rural landowners, farmers and Indigenous communities, said it is deeply concerned by the project’s progress.
The organization argues that communities have not been adequately consulted and has raised concerns about the potential safety, health and environmental risks associated with transporting pressurized carbon dioxide through pipelines beneath privately owned and Indigenous lands.
