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Ottawa and Alberta have agreed on a memorandum of understanding for a bitumen pipeline that can transport one million barrels daily to a port, in British Columbia. Following years of conflict might this at be the breakthrough the Canadian energy industry has been anticipating?

For industry leaders and the Alberta government the announcement represented a success—a sign of harmony with the federal government that had been absent for years. This revived collaboration is a shift from the typical deadlock generating hope that could lead to fresh discussions and planning for projects long delayed. It marks progress, a triumph, in a sector that has encountered significant challenges.

However a detailed examination uncovers a document filled with stipulations rather, than promises. Picture an investor examining the fine details. The project needs to be funded but only following the endorsement of both Indigenous communities and the province of British Columbia. It is required to utilize steel and provide “significant” economic advantages to B.C. Most importantly construction is not permitted to start until the ambitious Pathways Alliance carbon capture initiative is finished. This is not a way ahead; it’s a labyrinth of requirements without any schedule and no funds allocated. It seems like a plan for a process and more, like a gaudy bait meant to garner political praise instead of genuine investment.

Central to this agreement is the Pathways Alliance initiative, recognized as one of Canada’s most expensive decarbonization endeavors. The strategy includes constructing a 400-600 kilometer pipeline designed to capture emissions, from twenty oil sands operations and sequester them underground with projected costs ranging from $16 to $24 billion. Although advocates view it as a method to generate “carbon” oil and achieve climate goals the financial viability remains uncertain. As expenses for carbon capture increase and the worth of carbon credits remains unpredictable the whole initiative depends heavily on subsidies and consistent regulatory backing. Since Canadas future, in energy exports is now closely linked to this technological and financial risk what are the consequences if the carbon capture effort delays or does not fulfill its commitments?

As Canada deliberates over these challenges the worldwide energy competition is quickening. The United States is rapidly constructing pipelines and LNG terminals at a rate. Saudi Arabia and Russia are reinforcing their control, over the energy market. Of the five oil-producing nations Canada is the only one linking new export capacity to costly carbon capture requirements. This self-inflicted obstacle prompts a question: why are we opting for a route that no other leading rival is pursuing?

At the time a possible geopolitical change is emerging that might directly affect Canada’s main market. The United States might be considering Venezuela possessing some of the oil reserves globally as a fresh strategic ally. For Washington partnering with Venezuela would achieve two goals: obtaining a supply of heavy crude and diminishing Chinese and Russian influence in its neighborhood. Venezuelan heavy crude closely resembles bitumen chemically so it could easily substitute Canadian barrels at refineries, on the U.S. Gulf Coast. Although Canada continues to be an steady source it does not provide the same strategic advantage to the U.S. As removing competing powers from its immediate vicinity.

Canada now stands at a moment. The nation may persist with acts and intricate conditional deals that discourage private capital. Alternatively it could embark on regulatory changes that offer the transparency and certainty essential, for developing significant infrastructure undertakings. In the absence of a competitive structure the only pipelines constructed will exist merely in announcements and the sector might undergo further mergers and job reductions as it adjusts to a highly restricted outlook.

What happens if private capital decides this memorandum isn’t worth the risk, leaving Canada watching from the sidelines as global energy markets are reshaped without it?