Canada’s oil and gas sector is waiting with bated breath to see what Thursday’s announcement of a memorandum of understanding (MOU) between Prime Minister Mark Carney and Alberta Premier Danielle Smith brings.Sources have reported that the MOU would grant Alberta exemptions from federal clean electricity regulations in exchange for a strengthened industrial carbon price.Reportedly, the deal is also expected to outline a path for a pipeline from Alberta to the northwest BC coast and grant exemptions to the federal tanker ban along the northern BC coast as well.For industry leaders like John Gorman, Halliburton’s vice-president for Canada and the US west coast, “skeptically optimistic” is how he would describe expectations.“We’ve had ten tough years in Canada of not being able to get things done, but we’re more optimistic than we have been,” Gorman told the media in Calgary on Wednesday.“Prime Minister Carney knows that, to return Canada to its place as a global energy player, it needs to embrace not just oil and gas, but the natural resources industry at large.”Randy Ollenberger, managing director at BMO Capital Markets, was more blunt on the situation when asked about investment and a potential proponent for the west coast pipeline proposal.“No one is stepping up because they don’t know what the rules are. There’s no proponent because they don’t know the regulations or the conditions under which they’d build,” he said.“People point to Trans Mountain’s cost overruns — from $7 billion to $34 billion — and no publicly traded pipeline company is going to say, ‘I’ve got a blank cheque.’”.Enserva's oil and gas forecast shows lower investment, rising LNG demand for 2025-26.Ollenberger added that environmental responsibility is essential going forward but must be balanced with regulatory efficiency.“We’ve always built pipelines responsibly,” he said.“But we need to get back to building them efficiently, without endless reviews that massively inflate costs.”Geopolitical dynamics are also weighing on the energy sector’s sentiment and what could possibly happen if the project to BC’s northwest coast isn’t approved sooner rather than later, given the threat of possible American intervention in Venezuela, which could introduce a cheaper supply source of heavy oil to the global market.“Venezuela is producing about 900,000 barrels a day and could probably double that within 12 to 18 months,” Ollenberger said when asked by the Western Standard about the possibility of a regime change in that country favourable to US interests.“It’s a cheaper source and it’s closer [to the Gulf Coast]. I think it is a potential negative out there, but I don't think it's well understood yet. We really don't know what way it's going to go. That’s a major increase in heavy oil on the market. We produce heavy oil, so that does take away some market for us.”Ollenberger suggested in that scenario, Canada may need to lean more heavily on LNG exports, which provide broader economic benefits for Western Canada through jobs and drilling activity.While the MOU could signal a political thaw between Alberta and Ottawa, both Gorman and Ollenberger believe that the real test will be whether the deal leads to regulatory certainty and market conditions that encourage private investment.“The starter gun has just gone off and it’s a marathon,” Ollenberger said.“We're [still] really far away [from the finish line].”
