From 'absolutely critical' to 'should be repealed': Has industry turned on industrial carbon pricing?

Nearly a twelvemonth ago, the caput of a large oilsands consortium called connected Pierre Poilievre to clarify his presumption connected concern c pricing.

The national Conservative person had vowed — loudly and repeatedly — to "axe" the consumer-level c tax, but had been evasive at the clip astir his presumption connected the federally mandated c terms for large-scale emitters.

"I deliberation it would beryllium precise adjuvant for him to supply greater clarity connected that," Pathways Alliance enforcement president Derek Evans told CBC's West of Centre in May 2024.

Ten months later, Evans got his answer, large and clear.

On Monday morning, Poilievre pledged to destruct the national backstop connected concern c pricing, if his enactment were to signifier the adjacent government. His program would permission it up to provinces to tally their ain carbon-pricing systems (as astir presently do) oregon to scrap those systems altogether (which they presently can't do, lest the national backstop beryllium applied).

By Monday afternoon, the caput of a cleanable vigor think-tank was criticizing Poilievre's plan, pointing retired that manufacture leaders person historically been connected committee with this attack to industrial c pricing, possibly calling for tweaks but not for a implicit abandonment of national standards.

WATCH | Pembina Institute manager discusses c taxation shift:

"There truly isn't anybody successful firm Canada that's calling for what the Conservative Party has announced today," Pembina Institute enforcement manager Chris Severson-Baker told CBC's Power & Politics.

Until Wednesday, astatine least.

That's erstwhile the heads of much than a twelve large lipid and state companies released an unfastened missive titled "Build Canada Now" that, among different things, called for fundamentally what Poilievre had projected 2 days earlier.

"The national c levy connected ample emitters is not globally outgo competitory and should beryllium repealed to let provincial governments to acceptable much suitable c regulations," the radical of 14 CEOs, presidents and committee chairs wrote.

Among the signatories were 5 of the six companies that marque up the Pathways Alliance, the consortium of oilsands operators chaired by Evans, who little than a twelvemonth earlier was striking rather a antithetic enactment connected c pricing successful Canada.

"The proposal I would springiness Pierre Poilievre is c argumentation is going to beryllium perfectly captious to support our lasting connected the satellite stage," Evans said astatine the time.

"We've talked for 40 years astir clime change. And we've done very, precise small astir it."

Carbon capture's reliance connected c pricing

The Pathways Alliance was created erstwhile six of Canada's largest oilsands producers — Canadian Natural Resources Limited, Cenovus, ConocoPhillips Canada, Imperial Oil, MEG Energy and Suncor — came together successful an effort to trim the industry's greenhouse state emissions.

The consortium proposes to bash this done c seizure connected a monolithic and unprecedented scale.

The "foundational project" it wants to physique includes much than 400 kilometres of pipeline linking much than 20 facilities to a "carbon retention hub" successful northeastern Alberta, wherever it would beryllium permanently stored underground.

The program is to person this $16.5-billion project sequester an eye-popping 40 megatonnes of greenhouse state annually, erstwhile it's afloat operational successful 2050. (For context, Canada, arsenic a whole, captured a grand full of 7.2 megatonnes from 2017 to 2022.)

Underpinning Pathways' ambitious connection is the fiscal inducement created by c pricing.

The imperishable sequestration of truthful overmuch CO2 would make tremendous amounts of emissions credits, which person monetary worth due to the fact that they tin beryllium utilized to trim a company's carbon-price obligations oregon sold to different companies for cash.

The Canadian Climate Institute estimates that manufacture already holds adjacent to $5 cardinal worthy of emissions credits successful Alberta and notes these assets "were acquired with the anticipation of generating a instrumentality arsenic the c terms rises."

Evans said past twelvemonth that "there isn't a large capable marketplace for c successful the state of Alberta" to grip the standard of what Pathways is proposing to bash with its flagship project.

"We request a pan-Canadian c market," helium said. "At immoderate constituent successful time, the volumes of credits that volition beryllium generated with Pathways Alliance volition overwhelm immoderate azygous marketplace successful its ain right."

But now, little than a twelvemonth later, a bulk of the Pathways members are calling for the Canadian carbon-pricing strategy to beryllium abandoned successful favour of a much fragmented, province-by-province approach.

What gives?

Rhetoric, world and details

While determination has been a distinctive alteration successful code coming from the lipid industry, if you parse the details of what's present being said, it's not needfully a contradiction of what was being said previously.

Asking that provinces beryllium allowed to "to acceptable much suitable c regulations," for instance, does not connote abandoning c pricing altogether.

And it's not intolerable to ideate a "pan-Canadian c market" that allows for interprovincial credit trading, adjacent without federal rules governing c pricing astatine a nationalist level. Trading markets that span subnational jurisdictions bash exist. Look nary further than Quebec, which has a linked cap-and-trade strategy with the authorities of California.

But in practice, the alteration successful rhetoric matters a lot, says University of Alberta vigor and biology economist Andrew Leach.

"You've seen the Overton model connected this determination dramatically," Leach said Wednesday connected Alberta@Noon, referring to the scope of opinions and ideas acceptable in mainstream governmental sermon astatine a fixed time.

"You're seeing it conscionable beryllium overmuch much permissible for idiosyncratic to say, either straight oregon successful code, we're not going to enactment connected clime change. And that CEO letter, I mean, is fundamentally there, right?"

LISTEN | Are carrots amended than sticks erstwhile it comes to reducing c emissions? 

Still, starring voices successful the lipid manufacture haven't travel close retired and said c pricing should beryllium abandoned altogether.

"Let's remember we've had a terms connected c successful Alberta acold earlier the national authorities imposed that approach," Tristan Goodman, president of the Explorers and Producers Association of Canada, told The Calgary Eyeopener on Thursday.

"We request thing that allows much flexibility for provinces," helium added.

Putting pricing wholly successful the purview of the provinces would person a peculiarly profound effect connected the lipid and state industry, which accounts for the bulk of emissions successful Alberta — a state that leads each others, by far, erstwhile it comes to greenhouse state output.

Indeed, carbon-intensive industries that are little concentrated successful Alberta person staked retired nationalist positions with a little confrontational code than that of the lipid and state executives successful the 'Build Canada Now' letter.

"We enactment concern c pricing arsenic the backbone of decarbonization crossed this country," a radical that includes the Canadian Manufacturers and Exporters manufacture association, the Canadian Steel Producers Association and the Cement Association of Canada wrote successful an unfastened missive of their ain past October.

"Yet this captious argumentation isn't moving arsenic good arsenic it should," the missive continued. "A patchwork of provincial c pricing systems has produced galore barriers and created important reddish portion crossed efforts to decarbonize our economy."

Poilievre's promise to scrap the national backstop came with a parallel committedness to grow eligibility for national subsidies to reward industries that are effectual successful reducing successful emissions, successful what the Conservative person described arsenic a "carrot, not stick" approach.

Canadian Exporters and Manufacturers CEO Dennis Darby told CBC's Power & Politics he'd person to cognize much earlier being capable to measure either the Conservative program or, for that matter, what the Liberals present person successful caput with their caller leader.

Prime Minister Mark Carney has said he'll purpose to "improve and tighten" concern c pricing successful an effort to thrust much investments to "the lowest-carbon opportunity" but has not released a elaborate argumentation proposal.

"The devil's successful the details," Darby said.

"Of course, manufacture needs incentives. But what we need, much certainly, is we request certainty."

Where does this permission the Pathways project?

The Pathways Alliance has not made a determination to spell ahead with its monolithic carbon-capture project, but Evans said past twelvemonth helium was "sick and bushed of each of the speech and the deficiency of action" erstwhile it comes to addressing clime alteration successful Alberta's oilsands and helium was personally committed to seeing it through. 

"This is astir apt 1 of the astir important things I've done successful my vocation and this is important to me, personally, arsenic good arsenic professionally," helium said.

Critics person accused the Pathways task of being much speech than action and questioned whether c seizure tin beryllium relied upon to specified a grade erstwhile it comes to gathering Canada's clime commitments.

Doubt has been formed connected the fiscal feasibility of the project as well, adjacent earlier the further uncertainty generated by the alteration successful Liberal enactment and Poilievre's committedness to scrap the national backstop.

"Even nether optimal conditions, the Pathways task whitethorn conflict to interruption even, and real-world operations are seldom optimal," reads a December 2024 study from the Institute for Energy Economics and Financial Analysis.

The study notes carbon-capture costs are "approaching thresholds that endanger profitability" and determination is simply a hazard that an "oversupply of c emanation show credits" could thrust down the worth of those credits and reduce prospective revenues.

The Pathways Alliance told CBC News it had nary remark connected Poilievre's committedness to get escaped of the national backstop.

And portion executives of 5 of its six subordinate companies called for the backstop to beryllium repealed, the lone subordinate that didn't motion says the missive does not correspond its presumption oregon that of the consortium much broadly.

"The 'Build Canada Now' missive was not sent connected behalf of the Pathways Alliance," ConocoPhillips spokesperson Dennis Nuss told CBC News successful an email. "Our committedness to the Pathways Alliance is unchanged."

The company's presumption connected c pricing, helium added, is outlined connected its website.

"ConocoPhillips believes a well-designed pricing authorities connected c emissions is the astir effectual instrumentality to trim [greenhouse gas] emissions crossed the planetary economy," it states.