Why is the Cenovus CEO saying the West Coast pipeline is doomed?
Cenovus CEO Jon McKenzie recently said, “Neither the Pathways project nor the West Coast pipeline really make any sense."
Cenovus Energy says it will be impossible for the private sector to finance the proposed pipeline from Alberta to British Columbia’s coast under Ottawa’s current regulatory framework.
Cenovus CEO Jon McKenzie made the comments at the Global Energy Show in Calgary on Tuesday, adding that the Liberals’ industrial carbon pricing system leaves Canadian oil uncompetitive on the global market.
“Neither the Pathways project nor the West Coast pipeline really make any sense,” he said.
The CEO’s comments contradicted an earlier speech from Canada’s Energy Minister Tim Hodgson, who claimed that the pact with Alberta created “a carbon market that works” to give investors long-term certainty, and “a practical middle ground.”
McKenzie, who heads one of Canada’s largest energy companies, said the industrial carbon levy also inhibits the production growth needed to supply the proposed pipeline, which aims to transport one million barrels of oil per day.
Alberta Premier Danielle Smith echoed Hodgson’s stance during her own speech, saying that there is “increasing scrutiny and concern” regarding how energy is produced, adding that Alberta will prioritize “maintaining a stable, reliable supply of energy while continuing to reduce emissions and support innovation.”
However, McKenzie said the only certainty the Ottawa-Alberta deal provides investors is that Canada remains “increasingly out of step and uncompetitive.”
“None of our customers have ever suggested or even asked about the carbon intensity of our crude,” he said. “Industry has been clear that the industrial carbon tax is insidious and it should be revoked.”
Conservative Leader Pierre Poilievre called for the system to be removed altogether when asked about the future of the industrial carbon tax in the wake of the Carney government signing a memorandum of understanding for a reduced rate on Alberta.
“We should get rid of the carbon tax,” said Poilievre on Wednesday. “The industrial carbon tax is a costly, job-killing disaster that will push business and money out of our country and push the cost of food, housing and everything else higher.”