Canada's Energy Future Pivots Overseas with Federal-Alberta Pact
A new federal-Alberta MOU aims to make Canada an energy superpower by diversifying exports beyond the U.S., leveraging TMX and LNG, and advancing CCS projects.
Local economists at ATB Financial highlight a significant reorientation in Canadian energy policy, following last week’s Memorandum of Understanding (MOU) between Alberta and Ottawa. ATB ECONOMICS' Mark Parsons notes this agreement represents a strategic pivot towards Canada achieving "energy superpower" status by actively pursuing overseas markets.
This shift is crucial for mitigating risks associated with relying heavily on a single export market, a vulnerability evidenced by historical Western Canada Select crude oil discounts to West Texas Intermediate, which averaged US$45.48 per barrel in October 2018. PM Mark Carney's federal government has outlined ambitious goals, including doubling non-U.S. exports and enabling $1 trillion in investment over the next five years. Early successes include the Trans Mountain Expansion (TMX) project entering commercial operations in May 2024, leading to a surge in crude oil exports to Asia. Data indicates TMX achieved a record average daily throughput of 777,000 barrels per day in Q3 2025. Additionally, LNG Canada successfully loaded its first liquefied natural gas cargo from Kitimat in June 2025, marking Canada’s entry into global LNG exports.
Policy and Investment Outlook
The MOU outlines Alberta’s commitment to ramp its industrial carbon price under the Technology Innovation and Emissions Reduction (TIER) system to a minimum effective credit price of $130/tonne, though Alberta Premier Danielle Smith emphasizes industry affordability. Key deadlines loom, with agreements on industrial carbon pricing equivalency, methane equivalency, and a tri-lateral Memorandum of Understanding with the Pathways companies for Carbon Capture and Storage (CCS) all scheduled for conclusion on or before April 1, 2026. Looking ahead, Alberta is designated as the proponent for a new privately financed west coast oil pipeline, with an application due to the federal Major Projects Office by July 1, 2026, potentially benefiting from expedited review under the *Building Canada Act*.
