Canada takes key step towards new oil pipeline to serve Asia markets

Expanding energy exports is part of PM Carney’s strategy to reduce reliance on the US under Trump

Prime Minister Mark Carney and the leader of Canada’s oil-rich Alberta province took a major step on Friday towards building an oil pipeline that could substantially increase crude exports to Asia.

Expanding overseas energy exports has emerged as a key part of Carney’s strategy to reduce Canada’s economic reliance on the US, but plans for a new pipeline are facing stiff resistance over environmental concerns.

Alberta’s conservative Premier Danielle Smith was a relentless critic of Carney’s climate-focused predecessor, Justin Trudeau, accusing him of suffocating the province’s oil industry, but she has sought to work with Carney.

Carney and Smith cleared a key hurdle towards a new pipeline on Friday by signing a deal on industrial carbon pricing, a system that extracts a fee from large-scale CO2 emitters.

Oil companies have been critical of the system, but Smith said Friday that the prohibitive rates set under Trudeau’s government had been “rolled back”.

Ottawa and the provincial government agreed that the rate would gradually rise to a fee of C$130 (US$96) per tonne of CO2 emitted by 2040. Trudeau had called for a rate of C$170 by 2030.