Canada’s oil sands have a big year ahead of them

As Canada ramps up efforts to meet its lofty decarbonization goals, the country’s oil sands are scrambling to keep up.

What happened: The Pathways Alliance, a group of Canadian energy giants representing 95% of oil sands production, signed an agreement with the Alberta government to assess a potential underground carbon storage project in the northern part of the province. 

The assessment will help the companies draft a final application for the project by the end of this year. If that happens, some facilities could potentially start burying gas as early as 2026.

Yes, but: The project will cost ~$16.5 billion and Pathways kind of wants the government to pay for (part of) it. If the feds don’t pony up, the whole thing could go up in CO2 smoke. 

Why it matters: By year’s end, most of the policies that will determine how Canada meets its goal of reducing carbon emissions by 40% from 2005 levels by 2030 will be set in stone. As Canada’s largest emitter, the oil industry is banking on CCUS to cut its emissions and is really starting to feel the pressure to get the wheels in motion. 

“It’s a pivotal year,” Kendall Dilling, the President of the Pathways Alliance told the Financial Post. “2023 will determine whether we achieve these 2030 targets.”