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By Iain Boekhoff and Robert Tuttle
Jon McKenziePhotographer: Gavin John/Bloomberg
The leader of one of Canada’s biggest oil companies blasted a government push for a massive carbon-capture project and carbon tax in exchange for an oil-sands pipeline as anticompetitive and uneconomic.
A recent federal-provincial pact aimed at advancing the Pathways project failed to address regulatory barriers to increasing investment in Alberta’s oil sector, Cenovus Energy Inc. Chief Executive Jon McKenzie said Tuesday. Without such investment, “neither the Pathways project nor the West Coast pipeline really make any sense,” he said.
In one of the strongest industry rebukes of the proposal, McKenzie told the audience at a Calgary conference that the twin burdens of a planned carbon tax and construction costs mean the “pipeline is unfinanceable.”
McKenzie pegged the cost of Pathways at C$20 billion to C$30 billion ($14.3 billion to $21.5 billion).
Canadian Prime Minister Mark Carney’s government has conditioned support for a new pipeline to the Pacific Coast on the carbon project as well an industrial carbon tax.
The Alberta government has agreed to a structure for the tax but no deal has yet been reached with the major oil sands companies.
“Industry has been clear that the industrial carbon tax is insidious and it should be revoked,” McKenzie said.
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