Ron Wallace is a former Member of the National Energy Board. Tammy Nemeth is a UK-based energy and ESG analyst.As Alberta struggles to come to terms with a Memorandum of Understanding (MoU) that would apparently require Canadian taxpayers to cover approximately 62% of the $16.5-billion Pathways Alliance CCUS project, elsewhere in Canada, there was welcome news as the Bay du Nord deepwater oil project on the Canadian East Coast reached a key milestone. While the partners have yet to reach a Final Investment Decision (FID), the recent signing of a benefit agreement between Newfoundland and Labrador and Equinor nonetheless marks a significant step forward for the $11.9 billion project. First oil from Bay du Nord could be produced by 2031 with a production capacity of up to 160,000–175,000 bbl/d. As part of efforts to make Canada an energy superpower, Natural Resources Canada commented that it: “… is committed to helping de-risk this project to enable this important investment in Canada’s energy future to move forward.”Meanwhile, the LNG tanker Maran Gas Hector, having sailed roughly 25,750 km from Gladstone, Australia, has delivered the first recorded shipment of Australian LNG to Canada into the Port of Saint John, New Brunswick. LNG tankers of this class (Maran Gas series) typically carry ~170,000–180,000 cubic metres (m³) of LNG. That Canadian port, which already hosts a large Repsol LNG import terminal, has previously received LNG shipments of approximately 286,000 tonnes in 2024 and 176,000 tonnes in 2023, respectively. Concurrently, the Suezmax Tanker SFL Albany, loaded with approximately one million barrels of Saudi crude, is reported to have departed the Persian Gulf port of Ras Tanura. Having rounded the Cape of Good Hope, the tanker is bound for Canaport (Saint John, NB) with an arrival date for late March 2026..What do these seemingly unrelated energy events have in common? First, none of the announcements involve Alberta, and second, at no point have the terms “Decarbonization” or “Carbon Capture and Storage” been invoked for these developments.Alberta and Canada are negotiating terms and conditions under an MoU signed on November 27, 2025, with far-reaching implications for carbon pricing, major infrastructure, methane rules, and the future of oilsands decarbonization. Those terms would commit Western Canadian oil producers to a proposed, steep Industrial Carbon Tax needed to underpin massive investments for a “decarbonized” oil export pipeline from Alberta. The MoU aligns federal–provincial climate policies for industrial carbon with Alberta’s Technology Innovation and Emissions Reduction (TIER) Program, with a minimum effective credit price of $130 per tonne. This would represent a significant increase from Alberta’s current market credit price.Meanwhile, the Bay du Nord project and the importation of LNG and oil from international sources remain free from any such considerations..There is yet another irony to these announcements: Because the Bay du Nord project is located outside Canada’s 200 nautical-mile offshore continental boundary, it appears to be subject to terms under UNCLOS Article 82, whereby coastal states agree to pay a percentage of their resource value (effectively a royalty) into funds set out for the International Seabed Authority (ISA). As confirmed by Federal Fisheries Minister Joanne Thompson, the federal government is more than willing to “de-risk” the project by covering these obligations, which could reach $1 billion over the project’s lifespan.The federal government plans to “derisk” the offshore project but does not expect Canadian or foreign offshore oil to be “decarbonized,” even as it provides major subsidies for international commitments. Alberta is, by contrast, being held to far higher regulatory and economic standards under the MoU. These are policies that saddle Western Canadian producers with billions in abatement costs to “earn” new export market access while the federal government subsidizes Eastern Canadian offshore developments and ignores comparable standards for “decarbonization” of those imports. These arbitrary, inconsistent policies may be politically expedient, but they risk a deepening economic alienation in Western Canada. Energy Minister Tim Hodgson admitted to the IEA last week that global buyers are not yet paying premiums for decarbonized oil or low-emission LNG. Nonetheless, his government believes they will do so. Is it fair and equitable that Western Canadian oil must be “decarbonized” while Eastern Canadian importers and oil producers are free from any comparable regulatory or financial burdens? These inconsistent policies threaten the competitiveness of Western Canadian oil exports at a time when Canada is fast becoming an international outlier in the global oil export market by pretending that there is a demand for “decarbonized” oil. Is this something that Alberta should willingly agree to?Ron Wallace is a former Member of the National Energy Board. Tammy Nemeth is a UK-based energy and ESG analyst.
