The coming year could mark a turning point for the expansion of Canada’s oil and gas sector as governments look to harness its resources to drive economic independence and prosperity.

Against a backdrop of steady drilling activity and continued production growth, new major export projects are expected to take significant steps forward. 

Here are five key developments to watch. 

5. Modest growth in drilling activity

Oil and gas drilling in central Alberta, fall 2025. Photo supplied to the Canadian Energy Centre

Oil and gas drilling in Western Canada is set for modest increases in 2026 amid flat oil price forecasts and softer natural gas prices, according to the Canadian Association of Energy Contractors (CAOEC).

CAOEC projects an average of 213 active drilling rigs, up from 201 in 2025. A total of 5,709 wells are expected to be drilled, an increase of just under three per cent.

This will be accompanied by an average of 458 active service rigs, up from 447 in 2025. 

The activity is expected to support 85,000 direct and indirect jobs over the year. 

“These aren’t abstract figures; they’re the heartbeat of Canada, the proof that our work isn’t just about extracting resources — it’s about giving Canadians a hopeful future,” said CAOEC CEO Mark Scholz.

4. New investment spurred by Alberta-Canada agreement

Oil sands workers in northern Alberta. Photo courtesy Pathways Alliance

The recent wide-ranging energy agreement between the Alberta and federal governments could unlock new investment in data centres, emissions-reduction technology and oil sands growth in 2026.

The deal is “formidable,” Edmonton-based Capital Power CEO Avik Dey told investors in December. 

“It allows us a pathway to building new natural gas-fired power generation in Alberta,” he said.

The company announced it is now negotiating an electricity supply agreement with an unnamed data centre developer in the province.

Policy think tank Clean Prosperity estimates the $130-per-tonne carbon credit price agreed to by Alberta and Ottawa could unlock more than $90 billion in low-carbon investment including carbon capture and storage (CCS).

And as details of Alberta’s proposed pipeline to the northwest coast become clearer, oil sands producers could begin dusting off expansion plans.

According to BMO Capital Markets, producers have already submitted project proposals with combined capacity of 4.1 million barrels per day — enough to more than double current oil sands production.

This total includes both approved projects and proposals that are currently on hold or delayed.

3. Data centres taking flight

Alberta’s goal of attracting $100 billion in data centre investment is expected to advance in 2026 as key policy measures take shape and new projects receive approval.

Interest is strong, with proposed data centres now requesting more than 20 gigawatts of power, according to the Alberta Electric System Operator. 

The province passed legislation in 2025 that encourages data centres to bring their own generation to support their connection to the power grid. This is designed to enhance reliability of the grid while accelerating the approval process for data centre projects.

In December, two European companies announced a $1.26 billion plan to build four new AI-ready data centres in Alberta. 

Portugal-based Technologies New Energy will supply 80 per cent of the power for the new data centres for Data District Inc., a division of Swiss asset management firm Alcral AG. 

“Alberta offers the energy resources, industrial base and investment momentum to support this growth,” TNE said in a statement.

Initial operations are targeted for 2026.

2. Go-ahead for Ksi Lisims LNG

Rendering of the proposed Ksi Lisims LNG project. Image courtesy Ksi Lisims LNG

An Indigenous-led floating LNG terminal on B.C.’s northern coast near Alaska is “not far off” from a final decision to proceed. 

That milestone is expected in 2026, spokeswoman Rebecca Scott said in November. 

Ksi Lisims (pronounced “s’lisims”) is a partnership between the Nisga’a Nation, a consortium of Canadian natural gas producers called Rockies LNG, and a subsidiary of Houston-based Western LNG. 

The 12-million-tonne-per-year project would help significantly expand Canada’s LNG export capacity, which is currently about 14 million tonnes per year. 

In November, Ksi Lisims was referred for fast-tracking by Canada’s new Major Projects Office (MPO). 

Start-up is targeted for 2029.   

1. Advancing a new northwest coast oil pipeline

Pipe in storage for the Trans Mountain expansion near Hope, B.C. in August 2019. CP Images photo

Alberta’s application to the MPO for a new oil pipeline to the northwest coast is expected by July 1, 2026. 

It’s a project that’s been designated in the national interest as a key measure to establish Canada as an energy superpower.

The pipeline application is expected to target a deep-water port for oil exports to Asian markets, while creating opportunities for Indigenous ownership. 

If a proposal is approved, the federal government has committed to enabling bitumen exports, including an “appropriate adjustment” of the tanker moratorium on B.C.’s north coast if necessary. 

The governments have also agreed to a maximum two-year timeframe for permitting and approvals.

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A new online tool is mapping Canada’s carbon capture story.

The Government of Alberta and Regina-based International CCS Knowledge Centre have launched an interactive map and research repository showcasing Canada’s experience with carbon capture, utilization and storage (CCUS). 

The platform is designed to help investors and policymakers make informed decisions about future projects, strengthening Alberta’s leadership in CCUS.

The map identifies nearly 60 proposed carbon capture, transportation and storage facilities in the province. 

“There is a big demand from people looking for CCS experience,” said Knowledge Centre CEO James Fann. 

With many of the leaders who built Western Canada’s CCS industry retiring — the first project, in Saskatchewan, began operating in 2000 — Fann said it’s important to ensure their expertise and research remain accessible.

“We learned it is really important to capture that information, that knowledge experience, while they are still engaged,” Fann said. 

“You can mix that human experience with what documentation is out there.”

Resources available on the new site include CCUS technology explainers, project economic tools and regulatory framework comparisons. 

The Knowledge Centre says looking at past and current projects can help future developers better tackle technical and economic challenges, share best practices and manage risks more effectively.

Fann said the team spent time engaging with stakeholders to determine the most effective resources to include on the site. 

“It was about a year of connecting with companies, one on one, and collecting all the information from around the world,” he said. 

“What would you like to see? What would help projects going forward? What would you be willing to share?”

There are around 20 resources on the site now, with a goal of 40 by the end of the year.

Alberta’s Ministry of Environment and Protected Areas said the new resource reflects the province’s growing CCUS sector.

“We have already sequestered 14 million tonnes of CO2 equivalent and are a model for jurisdictions around the world,” the Ministry’s office said in a statement.  

“By gathering insights from existing carbon capture projects and transforming them into practical tools and guidance, we’re helping industry move projects faster, protect jobs and lower emissions.”

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To the naked eye, it looks about as exciting as baking soda or table salt. 

But to the scientists in the University of Calgary chemistry lab who have spent more than a decade working on it, this white powder is nothing short of amazing. 

That’s because the material they invented is garnering global attention as a new solution to help address climate change.

Known as Calgary Framework-20 (CALF-20 for short), it has “an exceptional capacity to absorb carbon dioxide” and was recognized in connection with the 2025 Nobel Prize in Chemistry.

A jar of CALF-20, a metal-organic framework (MOF) used in carbon capture. Photo courtesy UCalgary

“It’s basically a molecular sponge that can adsorb CO2 very efficiently,” said Dr. George Shimizu, a UCalgary chemistry professor who leads the research group that first developed CALF-20 in 2013.

The team has been refining its effectiveness ever since.

“CALF-20 is a very exciting compound to work on because it has been a great example of translating basic science into something that works to solve a problem in the real world,” Shimizu said.

Advancing CCS

Carbon capture and storage (CCS) is not a new science in Alberta. Since 2015, operating projects in the province have removed 15 million tonnes of CO2 that would have otherwise been emitted to the atmosphere. 

Alberta has nearly 60 proposed facilities for new CCS networks including the Pathways oil sands project, according to the Regina-based International CCS Knowledge Centre. 

This year’s Nobel Prize in Chemistry went to three of Shimizu’s colleagues in Japan, Australia and the United States, for developing the earliest versions of materials like CALF-20 between 1989 and 2003.

Custom-built molecules

CALF-20 is in a class called metal-organic frameworks (MOFs) — custom-built molecules that are particularly good at capturing and storing specific substances. 

MOFs are leading to new technologies for harvesting water from air in the desert, storing toxic gases, and capturing CO2 from industrial exhaust or directly from the atmosphere. 

CALF-20 is one of the few MOF compounds that has advanced to commercial use.

“There has been so much discussion about all the possible uses of MOFs, but there has been a lot of hype versus reality, and CALF-20 is the first to be proven stable and effective enough to be used at an industrial scale,” Shimizu said.

It has been licensed to companies capturing carbon across a range of industries, with the raw material now being produced by the tonne by chemical giant BASF.

CO2 pipeline at the Quest CCS project near Edmonton, Alta. Photo courtesy Shell Canada

Carbon capture filter gigafactory

Svante Inc. has demonstrated its CALF-20-based carbon capture system at a cement plant in British Columbia.

The company recently opened a “gigafactory” in Burnaby equipped to manufacture enough carbon capture and removal filters for up to 10 million tonnes of CO2 annually, equivalent to the emissions of more than 2.3 million cars.

The filters are designed to trap CO2 directly from industrial emissions and the atmosphere, the company says. 

Svante chief operating officer Richard Laliberté called the Nobel committee’s recognition “a profound validation” for the entire field of carbon capture and removal. 

CALF-20 expansion

Meanwhile, one of Shimizu’s former PhD students helped launch a spinoff company, Existent Sorbents, to further expand the applications of CALF-20.

Existent is working with oil sands producers, a major steel factory and a U.S.-based firm capturing emissions from other point sources, said CEO Adrien Côté.

“The first users of CALF-20 are leaders who took the risk of introducing new technology to industries that are shrewd about their top and bottom lines,” Côté said.

“It has been a long journey, but we are at the point where CALF-20 has proven to be resilient and able to survive in harsh real-world conditions, and we are excited to bring this made-in-Canada innovation to the world.”

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We hear about Canada’s aspirations to become an “energy superpower” a lot these days. Easy to say, but what does it really mean? And if Canada can indeed become an energy superpower, how can we achieve that status?

Energy is at the core of everything humanity does. Growing our food, building and running our homes and businesses, making the goods and services we consume, and moving those goods – and ourselves – from place to place. 

Energy security is one of the most important human needs because we can’t live our lives without energy.

But many global citizens don’t have energy security today. Hundreds of millions of people around the world have little or no access to electricity, and billions more don’t have enough electricity to live a basic modern lifestyle. 

Many nations, even rich nations like Japan and Germany, can’t produce enough energy to meet the needs of their own citizens and industries, and have to rely on energy imports of coal, oil, gas, uranium and electricity from their neighbours and trading partners.

Only a few countries – like Canada, the United States, Australia and Saudi Arabia – are energy powers. They have substantial populations with modern, high-energy economies and they produce so much energy that they can export to others. 

But Canada stands out with the potential to be an energy superpower because our energy resources are enormous and diverse, supported by incredible geological riches across the entire country. 

The Global Energy Mix

More than 80 per cent of the energy humanity consumes comes from fossil fuels (oil, natural gas and coal). Long-term trends demonstrate that we will depend on fossil fuels for decades to come. 

Figure 1 shows global primary energy consumption by source for all our needs: electricity, industry, transportation and heat. 

The key to this graph is that we live in a time of energy addition – we’re using more energy from every source, all the time. Nothing is being displaced because there are more people on Earth every year, and each one of us wants a modern, energy-rich lifestyle.

Canada’s unique blessing as a budding energy superpower is that we are or have the potential to be a big player in all major categories of energy production, including oil and gas, nuclear power, hydroelectricity, renewables, lithium, hydrogen and coal. 

Our strength lies in our huge and diverse geological resources. 

Oil and Gas

Leading Canada’s enormous resource base is oil and gas. Geologists have discovered oil and gas in sedimentary basins across western, northern, central and eastern Canada (Fig. 2). 

Regarding oil, people think immediately about Alberta’s oil sands, which give Canada the fourth-largest global oil reserves. These reserves are being systematically and efficiently produced at rates that will support domestic consumption and exports for decades to come. 

We also have substantial oil reserves and production from traditional reservoirs in Western Canada and offshore Eastern Canada, where the Hibernia oilfield is a global supergiant.

But there’s more. These reserves represent only oil that has been discovered and proven economically viable to develop using existing technology. 

Our resource base – oil deposits we have identified but haven’t yet built the infrastructure or technology to access – is huge, diverse and world-leading. 

Canada’s untapped oil resources include untested oil sands plays, oil hosted in shales, undeveloped conventional oil discoveries in the Far North and huge oil resources off our eastern coast that are only now being explored. 

Canada not only supplies all its own oil needs, but it is also the fourth-leading oil exporter in the world today by volume. It has the resources to maintain and improve that position in the long term.

The story is similar for natural gas. 

Our traditional gas reserves were developed decades ago to fill our own needs and for export to the United States. Horizontal drilling and hydraulic fracturing technologies have increased our gas reserves base immensely over the past 20 years as we develop world-class shale gas plays like the Montney Formation in west-central Alberta and northeastern British Columbia. 

And like our oil resources, Canada’s gas resources have grown over time – with shale gas plays holding literally centuries of producing potential in Alberta, B.C., and the Northwest Territories. 

Other plays in Quebec, Ontario and the Maritimes have been mapped and await validation by drilling more wells. And let’s not forget massive but remote conventional gas discoveries and resource potential in the Northwest Territories, offshore Newfoundland and Labrador, and offshore Nova Scotia.

Nuclear Power – Uranium 

Electricity generation from nuclear fission has been an important component of global energy supply since the 1970s, and is rising again today (Fig. 1). Growth is accelerating as more people in more countries appreciate nuclear’s reliability and low emissions profile.

Canada is a nuclear leader with its CANDU nuclear generation technology, but also because of its rich uranium resources. 

Uranium is found in igneous and metamorphic rocks of the Canadian Shield, the geological heart of Central and Eastern Canada (orange area in Fig. 2). We have active mines in northern Saskatchewan and a rich inventory of uranium exploration prospects and resources in Ontario, Manitoba, Saskatchewan and the Northwest Territories (Fig. 3). 

Canada is the world’s second-leading producer and exporter of uranium, supplying our own nuclear reactors and many others across the globe – and has the resource base to improve that position as nuclear demand grows.

The World Nuclear Association has some great information about Canada’s uranium resources at https://world-nuclear.org/information-library/country-profiles/countries-a-f/canada-uranium, and the Canadian Nuclear Safety Commission has more on Canadian uranium mines and mills at https://www.cnsc-ccsn.gc.ca/eng/uranium/mines-and-mills/. 

Hydroelectricity

Canada is also a leader in another energy source high on the global supply chart: hydroelectricity. We produce more than 60 per cent of our electricity from hydro, particularly in British Columbia, Manitoba, Ontario and Quebec. 

Although somewhat indirectly, Canada’s geology is responsible for our rich hydro output and potential because geological processes formed the mountains of Western Canada and the extensive uplands of Eastern Canada that provide the topographic relief that gives energy to water rushing downhill to hydroelectric dams.

Carbon Capture and Storage – and Lithium

Not only do sedimentary rocks in Canada’s sedimentary basins host our fossil fuel resources, they contain immense volumes of highly saline water, much left over from the seas that deposited the sediments millions of years ago. 

This presents two critically important opportunities in today’s evolving energy picture.

The first is carbon capture and storage (CCS), which captures and stores carbon dioxide securely underground to reduce net greenhouse gas emissions. 

We can inject carbon dioxide into subsurface reservoirs where it can replace produced oil and gas, dissolve in the “oceans” of saline brine water, and eventually crystallize to form new minerals deep underground. 

CCS potential exists in all Canada’s sedimentary basins, but particularly in Western Canada, where we already have enormous knowledge and infrastructure in place. 

Alberta has designated 25 potential carbon “hubs” – massive projects to gather carbon dioxide and inject it into the best reservoir rocks. Since 2005, two operating CCS projects in the province (Quest and the Alberta Carbon Trunk Line) have sequestered approximately 15 million tonnes of CO2. 

Illustration showing an example of a hub model with multiple companies injecting into one hub location. Image courtesy Government of Alberta

Studies to assess CCS potential and capacity are underway across the country today, from the B.C. Lower Mainland to sedimentary basins offshore Eastern Canada.

Another potentially enormous energy-related resource in Canada’s sedimentary basins is lithium, a key metal for the production of batteries. Electrification and energy storage are big components of future energy, so demand for batteries – and lithium – is skyrocketing. 

Canadian explorers are global leaders in the effort to produce saline brines, extract the dissolved lithium, and re-inject the brines back into their subsurface reservoirs. The technology, engineering, and most importantly the geological resources to make this possible all exist in Western Canada, with companies looking to start commercial production within the next couple of years.

What About Natural Hydrogen?

Many believe that hydrogen will play an ever-increasing role in the global energy economy. Canada is a big hydrogen producer today, manufacturing hydrogen from natural gas for use in industrial processes, and actively reducing emissions by using CCS. 

But manufactured hydrogen – including green hydrogen made with renewable electricity – isn’t an energy source. It’s simply an energy medium that can be moved around like electricity. 

The real hydrogen energy potential lies in geologic (or “natural”) hydrogen that can be produced from the subsurface in the same way that natural gas is produced. 

So far, the world has one very small producing field, in the West African nation of Mali. 

Canada has geology favourable for natural hydrogen, and a number of properties in BC, Manitoba and Quebec have already been staked for hydrogen exploration and development work. If geologic hydrogen can be proven commercial, Canada will be a leader.

Will Canada Become an Energy Superpower?

Stacks of geological core samples are stored up to 8.5 metres high on specially designed racks at the Alberta Energy Regulator’s Core Research Centre in Calgary. Photo courtesy AER

Canada has excellent potential to become an energy superpower. Our energy resources are enormous and diverse, supported by incredible geological riches across the entire country. 

We’re a world-class exporter of oil, gas, coal, uranium and hydroelectricity. 

Canada has the geologic resources to become even more dominant in all of these, as well as in new areas like carbon storage, lithium extraction and geologic hydrogen.

We have to recognize that while Canada is blessed with immense energy resources, those resources exist in specific places and require specific processes to extract. We can produce oil and gas, coal, uranium (and maybe geologic hydrogen) only from the pools and fields where they occur. 

This is true even more broadly – we can generate hydroelectricity only from the rivers where the water flows, solar electricity only where there’s sufficient sunshine, and wind electricity only where it’s sufficiently windy.

A bigger challenge sometimes is not only accessing and producing the energy resources from the places they exist, but moving them to markets via rail, road, pipeline or transmission line – which of course comes with a whole different set of environmental, financial and social issues.

Will Canada be an energy superpower? We have unparalleled resource opportunities, but there’s still a lot of work to do.

Brad Hayes holds a PhD in geology from the University of Alberta, where he is an Adjunct Professor in Earth and Atmospheric Sciences. He has spent more than 40 years studying and assessing subsurface energy resources.

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Innisfail, Alta. is set to host the world’s first test centre for technology that removes carbon dioxide directly from the air to fight climate change.

This June, Montreal-based Deep Sky completed construction of a $110-million carbon removal innovation and commercialization centre in the town about 120 kilometres north of Calgary.

It is a key piece of the company’s vision to build 100 large-scale facilities across Canada and become a pioneer in the emerging market for direct air capture (DAC) technology.

“As of this summer, we will begin not only carbon removal, which is actually sucking it out of the air through these very powerful fans, but also liquefying it and then putting it underground for storage,” Deep Sky CEO Alex Petre told CTV News. 

Work began in August 2024 on the project known as Deep Sky Alpha, which aims to begin testing up to 10 different DAC technologies in real-world conditions. It is expected to be up and running this August. 

The Government of Alberta is investing $5 million in the facility through Emissions Reduction Alberta. 

The Deep Sky Alpha direct air capture test facility in Innisfail, Alta. Photo courtesy Deep Sky

Deep Sky’s facility will capture up to 3,000 tons of CO2 per year over the next 10 years, with room for future expansion. 

Captured CO2 will be transported by tanker trucks about 200 kilometres north to Sturgeon County where it will be injected more than two kilometres below the surface into the Meadowbrook Carbon Storage Hub. 

Operated by Bison Low Carbon Ventures, the project is the first approved under Alberta’s open-access carbon sequestration hub initiative and is expected to begin operations before year-end.

“We’re going to line up these eight units side by side and run them to see how they operate in the summer and in the cold of winter,” said Damien Steel, former Deep Sky CEO who continues to serve as a company advisor.

“We’ll be tracking everything to see how all these best-in-class technologies compare – what are their strengths and weaknesses – so that ultimately we can choose the best solutions to scale up for the major commercialization of carbon removal projects that are needed.” 

Unlike typical carbon capture and storage (CCS) projects that scrub CO2 from the exhaust of heavy industrial facilities such as power plants, refineries, cement plants or steel mills, DAC utilizes different technology to remove much lower concentrations of CO2 directly from the atmosphere. 

According to the International Energy Agency (IEA), there are 27 DAC plants operating worldwide, capturing almost 10,000 tonnes of CO2 per year. In order to reach net zero emissions by 2050, the IEA estimates DAC capacity must expand to more than 60 million tonnes per year by 2030.

Deep Sky selected Alberta for its test facility because of the province’s experience with CCS, including its advanced regulatory system for CO2 sequestration.

“To be successful at carbon removal you need three things: you need access to geologic storage, you need talent, and you need a reliable supply of renewable power to operate DAC facilities. Canada is blessed with these things, and Alberta especially has all of these attributes in spades,” Steel said.

Deep Sky Alpha is one of several clean tech projects underway in a five-acre industrial park in Innisfail as part of an economic diversification plan that was launched in 2022 to make the town a centre for energy innovation. 

A municipal solar farm and a power plant that burns garbage and will be equipped with CCS to eliminate emissions are also under development.

Deep Sky says that more than 110 jobs were created during the construction phase of its Innisfail project and it will employ 15 people for annual operations. 

Subsequent commercial plants it hopes to build across Canada will employ approximately 1,000 workers for construction and 150 for annual operations. 

Steel said he expects the DAC test facility will become a destination for those looking to advance CCS projects around the world, showcasing Canadian expertise in the process.

“My hope is that not only will we learn and improve carbon removal technology, but we will also put Canada on the map in terms of being a place where innovation can thrive and this industry can work,” he said. 

“It will be a place where corporate leaders, government officials and customers from around the world can come and see what direct air capture really is, how it works, and how Canada is the place to do it.”

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It’s a bright spring day on a stretch of rolling farmland just northeast of Red Deer. It’s quiet, but for the wind rushing through the grass and the soft crunch of gravel underfoot. 

The unassuming wellheads spaced widely across the landscape give little hint of the significance of what is happening underground.

In just five years, this site has locked away more than 6.5 million tonnes of CO₂ — equivalent to the annual emissions of about 1.5 million cars — stored nearly four CN Towers deep beneath the surface.

The CO₂ injection has not only reduced emissions but also breathed life into an oilfield that was heading for abandonment, generating jobs, economic activity and government revenue that would have otherwise been lost. 

This is Clive, the endpoint of one of Canada’s largest carbon capture, utilization and storage (CCUS) projects. And it’s just getting started. 

Rooted in Alberta’s first oil boom

Clive’s history ties to Alberta’s first oil boom, with the field discovered in 1952 along the same geological trend as the legendary 1947 Leduc No. 1 gusher near Edmonton.

“The Clive field was discovered in the 1950s as really a follow-up to Leduc No. 1. This is, call it, Leduc No. 4,” said Chris Kupchenko, president of Enhance Energy, which now operates the Clive field. 

Over the last 70 years Clive has produced about 70 million barrels of the site’s 130 million barrels of original oil in place, leaving enough energy behind to fuel six million gasoline-powered vehicles for one year. 

“By the late 1990s and early 2000s, production had gone almost to zero,” said Candice Paton, Enhance’s vice-president of corporate affairs. 

“There was resource left in the reservoir, but it would have been uneconomic to recover it.” 

Facilities at the Clive project. Photo courtesy Enhance Energy

Gearing up for CO2

Calgary-based Enhance bought Clive in 2013 and kept it running despite high operating costs because of a major CO2 opportunity the company was developing on the horizon. 

In 2008, Enhance and North West Redwater Partnership had launched development of the Alberta Carbon Trunk Line (ACTL), one of the world’s largest CO2 transportation systems. 

Wolf Midstream joined the project in 2018 as the pipeline’s owner and operator. 

Completed in 2020, the groundbreaking $1.2 billion project — supported by the governments of Canada and Alberta — connects carbon captured at industrial sites near Edmonton to the Clive facility. 

“With CO2 we’re able to revitalize some of these fields, continue to produce some of the resource that was left behind and permanently store CO2 emissions,” Paton said.

Map of the Alberta Carbon Trunk Line courtesy of Wolf Midstream

An oversized pipeline on purpose

Each year, about 1.6 million tonnes of CO2 captured at the NWR Sturgeon Refinery and Nutrien Redwater fertilizer facility near Fort Saskatchewan travels down the trunk line to Clive. 

In a unique twist, that is only about 10 per cent of the pipeline’s available space. The project partners intentionally built it with room to grow.  

“We have a lot of excess capacity. The vision behind the pipe was, let’s remove barriers for the future,” Kupchenko said.

The Alberta government-supported goal was to expand CCS in the province, said James Fann, CEO of the Regina-based International CCS Knowledge Centre.

“They did it on purpose. The size of the infrastructure project creates the opportunity for other emitters to build capture projects along the way,” he said.

CO2 captured at the Sturgeon Refinery near Edmonton is transported by the Alberta Carbon Trunk Line to the Clive project. Photo courtesy North West Redwater Partnership

Extending the value of aging assets

Building more CCUS projects like Clive that incorporate enhanced oil recovery (EOR) is a model for extending the economic value of aging oil and gas fields in Alberta, Kupchenko said.

“EOR can be thought of as redeveloping real estate,” he said. 

“Take an inner-city lot with a 700-square-foot house on it. The bad thing is there’s a 100-year-old house that has to be torn down. But the great thing is there’s a road to it. There’s power to it, there’s a sewer connection, there’s water, there’s all the things.

“That’s what this is. We’re redeveloping a field that was discovered 70 years ago and has at least 30 more years of life.”

The 180 existing wellbores are also all assets, Kupchenko said.

“They may not all be producing oil or injecting CO2, but every one of them is used. They are our eyes into the reservoir.”

CO2 injection well at the Clive carbon capture, utilization and storage project. Photo for the Canadian Energy Centre

Alberta’s ‘beautiful’ CCUS geology

The existing wells are an important part of measurement, monitoring and verification (MMV) at Clive.   

The Alberta Energy Regulator requires CCUS projects to implement a comprehensive MMV program to assess storage performance and demonstrate the long-term safety and security of CO₂.

Katherine Romanak, a subsurface CCUS specialist at the University of Texas at Austin, said that her nearly 20 years of global research indicate the process is safe.

“There’s never been a leak of CO2 from a storage site,” she said. 

Alberta’s geology is particularly suitable for CCUS, with permanent storage potential estimated at more than 100 billion tonnes. 

“The geology is beautiful,” Romanak said. 

“It’s the thickest reservoir rocks you’ve ever seen. It’s really good injectivity, porosity and permeability, and the confining layers are crazy thick.” 

Suitability of global regions for CO2 storage. Courtesy Global CCS Institute

CO2-EOR gaining prominence 

The extra capacity on the ACTL pipeline offers a key opportunity to capitalize on storage potential while addressing aging oil and gas fields, according to the Alberta government’s Mature Asset Strategy, released earlier this year.

The report says expanding CCUS to EOR could attract investment, cut emissions and encourage producers to reinvest in existing properties — instead of abandoning them. 

However, this opportunity is limited by federal policy.

Ottawa’s CCUS Investment Tax Credit, which became available in June 2024, does not apply to EOR projects.

“Often people will equate EOR with a project that doesn’t store CO2 permanently,” Kupchenko said. 

“We like to always make sure that people understand that every ton of CO2 that enters this project is permanently sequestered. And we take great effort into storing that CO2.” 

The International Energy Forum — representing energy ministers from nearly 70 countries including Canada, the U.S., China, India, Norway, and Saudi Arabia — says CO₂-based EOR is gaining prominence as a carbon sequestration tool.

The technology can “transform a traditional oil recovery method into a key pillar of energy security and climate strategy,” according to a June 2025 IEF report.

Drone view of the Clive project. Photo courtesy Enhance Energy

Tapping into more opportunity

In Central Alberta, Enhance Energy is advancing a new permanent CO2 storage project called Origins that is designed to revitalize additional aging oil and gas fields while reducing emissions, using the ACTL pipeline. 

“Origins is a hub that’s going to enable larger scale EOR development,” Kupchenko said. 

“There’s at least 10 times more oil in place in this area.” 

Meanwhile, Wolf Midstream is extending the pipeline further into the Edmonton region to transport more CO2 captured from additional industrial facilities. 

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It’s likely 2024 will go down in history as a turning point for Canadian energy, despite challenging headwinds from federal government policy.   

Here’s some of the good news.

10. New carbon capture and storage (CCS) projects to proceed 

Photo courtesy Shell Canada

In June, Shell announced it will proceed with the Polaris and Atlas CCS projects, expanding emissions reduction at the company’s Scotford energy and chemicals park near Edmonton.  

Polaris is designed to capture approximately 650,000 tonnes of CO2 per year, or the equivalent annual emissions of about 150,000 gasoline-powered cars. The CO2 will be transported by a 22-kilometre pipeline to the Atlas underground storage hub.   

The projects build on Shell’s experience at the Quest CCS project, also located at the Scotford complex. Since 2015, Quest has stored more than eight million tonnes of CO2. Polaris and Atlas are targeted for startup in 2028.    

Meanwhile, Entropy Inc. announced in July it will proceed with its Glacier Phase 2 CCS project. Located at the Glacier gas plant near Grande Prairie, the project is expected onstream in mid-2026 and will capture 160,000 tonnes of emissions per year.  

Since 2015, CCS operations in Alberta have safely stored roughly 14 million tonnes of CO2, or the equivalent emissions of more than three million cars. 

9. Canada’s U.S. oil exports reach new record 

Expanded export capacity at the Trans Mountain Westridge Terminal. Photo courtesy Trans Mountain Corporation

Canada’s exports of oil and petroleum products to the United States averaged a record 4.6 million barrels per day in the first nine months of 2024, according to the U.S. Energy Information Administration.  

Demand from Midwest states increased, along with the U.S. Gulf Coast, the world’s largest refining hub. Canadian sales to the U.S. West Coast also increased, enabled by the newly completed Trans Mountain Pipeline Expansion. 

8. Alberta’s oil production never higher

A worker at Suncor Energy’s MacKay River oil sands project. CP Images photo

In early December, ATB Economics analyst Rob Roach reported that Alberta’s oil production has never been higher, averaging 3.9 million barrels per day in the first 10 months of the year.  

This is about 190,000 barrels per day higher than during the same period in 2023, enabled by the Trans Mountain expansion, Roach noted.  

7. Indigenous energy ownership spreads 

Communities of Wapiscanis Waseskwan Nipiy Limited Partnership in December 2023. Photo courtesy Alberta Indigenous Opportunities Corporation

In September, the Bigstone Cree Nation became the latest Indigenous community to acquire an ownership stake in an Alberta energy project.  

Bigstone joined 12 other First Nations and Métis settlements in the Wapiscanis Waseskwan Nipiy Holding Limited Partnership, which holds 85 per cent ownership of Tamarack Valley Energy’s Clearwater midstream oil and gas assets.  

The Alberta Indigenous Opportunities Corporation (AIOC) is backstopping the agreement with a total $195 million loan guarantee.   

In its five years of operations, the AIOC has supported more than 60 Indigenous communities taking ownership of energy projects, with loan guarantees valued at more than $725 million.  

6. Oil sands emissions intensity goes down 

Oil sands steam generators. Photo courtesy Cenovus Energy

A November report from S&P Global Commodity said that oil sands production growth is beginning to rise faster than emissions growth.  

While oil sands production in 2023 was nine per cent higher than in 2019, total emissions rose by just three per cent. 

“This is a notable, significant change in oil sands emissions,” said Kevin Birn, head of S&P Global’s Centre for Emissions Excellence. 

Average oil sands emissions per barrel, or so-called “emissions intensity” is now 28 per cent lower than it was in 2009. 

5. Oil and gas producers beat methane target, again 

Photo courtesy Tourmaline

Data released by the Alberta Energy Regulator in November 2024 confirmed that methane emissions from conventional oil and gas production in the province continue to go down, exceeding government targets. 

In 2022, producers reached the province’s target to reduce methane emissions by 45 per cent compared to 2014 levels by 2025 three years early.  

The new data shows that as of 2023, methane emissions have been reduced by 52 per cent.  

4. Cedar LNG gets the green light to proceed 

Haisla Nation Chief Councillor Crystal Smith and Pembina Pipeline Corporation CEO Scott Burrows announce the Cedar LNG positive final investment decision on June 25, 2024. Photo courtesy Cedar LNG

The world’s first Indigenous majority-owned liquefied natural gas (LNG) project is now under construction on the coast of Kitimat, B.C., following a positive final investment decision in June.  

Cedar LNG is a floating natural gas export terminal owned by the Haisla Nation and Pembina Pipeline Corporation. It will have capacity to produce 3.3 million tonnes of LNG per year for export overseas, primarily to meet growing demand in Asia.  

The $5.5-billion project will receive natural gas through the Coastal GasLink pipeline. Peak construction is expected in 2026, followed by startup in late 2028. 

3. Coastal GasLink Pipeline goes into service 

Workers celebrate completion of the Coastal GasLink Pipeline. Photo courtesy Coastal GasLink

The countdown is on to Canada’s first large-scale LNG exports, with the official startup of the $14.5-billion Coastal GasLink Pipeline in November.  

The 670-kilometre pipeline transports natural gas from near Dawson Creek, B.C. to the LNG Canada project at Kitimat, where it will be supercooled and transformed into LNG.  

LNG Canada will have capacity to export 14 million tonnes of LNG per year to overseas markets, primarily in Asia, where it is expected to help reduce emissions by displacing coal-fired power.  

The terminal’s owners – Shell, Petronas, PetroChina, Mitsubishi and Korea Gas Corporation – are ramping up natural gas production to record rates, according to RBN Energy. 

RBN analyst Martin King expects the first shipments to leave LNG Canada by early next year, setting up for commercial operations in mid-2025.  

2. Construction starts on $8.9 billion net zero petrochemical plant  

Dow’s manufacturing site in Fort Saskatchewan, Alberta. Photo courtesy Dow

In April, construction commenced near Edmonton on the world’s first plant designed to produce polyethylene — a widely used, recyclable plastic — with net zero scope 1 and 2 emissions. 

Dow Chemicals’ $8.9 billion Path2Zero project is an expansion of the company’s manufacturing site in Fort Saskatchewan. Using natural gas as a feedstock, it will incorporate CCS to reduce emissions.  

According to business development agency Edmonton Global, the project is spurring a boom in the region, with nearly 200 industrial projects worth about $96 billion now underway or nearing construction.  

Dow’s plant is scheduled for startup in 2027.  

1. Trans Mountain Pipeline Expansion completed 

The “Golden Weld” marked mechanical completion of construction for the Trans Mountain Expansion Project on April 11, 2024. Photo courtesy Trans Mountain Corporation

The long-awaited $34-billion Trans Mountain Pipeline Expansion officially went into service in May, in a game-changer for Canadian energy with ripple effects around the world.   

The 590,000 barrel-per-day expansion for the first time gives customers outside the United States access to large volumes of Canadian oil, with the benefits flowing to Canada’s economy.   

According to the Canada Energy Regulator, exports to non-U.S. locations more than doubled following the expansion startup, averaging 420,000 barrels per day compared to about 130,000 barrels per day in 2023.  

The value of Canadian oil exports to Asia has soared from effectively zero to a monthly average of $515 million between June and October, according to ATB Economics. 

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Canada’s largest oil sands companies continue to advance a major proposed carbon capture and storage (CCS) network in northeast Alberta, including filing regulatory applications, conducting engineering and design, doing environmental surveys and consulting with local communities.   

Members of the Pathways Alliance – a group of six companies representing 95 per cent of oil sands production – are also now closer to ordering the steel for their proposed CO2 pipeline.   

“We have gone out to potential pipe suppliers and asked them to give us proposals on costs and timing because we do see this as a critical path going forward,” Imperial Oil CEO Brad Corson told analysts on November 1.  

He said the next big milestone is for the Pathways companies to reach an agreement with the federal and provincial governments on an economic framework to proceed.  

“Once we have the right economic framework in place, then we will be in a position to go order the line pipe that we need for this 400-kilometre pipeline.” 

Pathways – which also includes Suncor Energy, Canadian Natural Resources, Cenovus Energy, MEG Energy and ConocoPhillips Canada – is proposing to build the $16.5 billion project to capture  emissions from oil sands facilities and transport them to an underground storage hub. 

The project was first announced in 2022 but Pathways had not provided recent public updates. The organization had stopped advertising and even briefly shut down its website during the summer in wake of the federal government’s amendments to the Competition Act in June.  

Those changes include explicit provisions on the need to produce “adequate and proper testing” to substantiate environmental benefit claims. Critics say the provisions could lead to frivolous lawsuits and could or even scuttle the very projects that Canada is relying on to slash greenhouse gas emissions.  

In early December, the Alberta Enterprise Group (AEG) and the Independent Contractors and Businesses Association jointly filed a constitutional challenge against the federal government over the new “greenwashing” rules, which they say unreasonably restrict free speech. 

“These regulations pre-emptively ban even truthful, reasonable and defensible discussion unless businesses can meet a government-imposed standard of what is the truth,” said AEG president Catherine Brownlee. 

Pathways has since restored its website, and president Kendall Dilling said the organization and its member companies continue working directly with governments and communities along the corridors of the proposed CCS project. 

Canadian Natural Resources began filing the regulatory applications to the Alberta Energy Regulator on behalf of Pathways earlier in the year. The company has so far submitted 47 pipeline agreement applications along with conservation and reclamation plans in seeking approvals for the CO2 transportation network. 

Pathways has also continued consultation and engagement activities with local communities and Indigenous groups near its pipeline corridors and storage hubs. 

“Engagement is ongoing with local communities, Indigenous groups and landowners, as well as a consultation process with Indigenous groups in accordance with Aboriginal Consultation Office requirements,” Dilling says.  

An environmental field program that began in 2021 continues to survey the network’s project areas. 

“Environmental field studies are ongoing and we are supporting Indigenous groups in completing traditional land use studies,” Dilling says.  

“Studies are supported by hundreds of heritage resource assessments, wetland classifications, soil assessments, aquatic habitat evaluations and other environmental activities.” 

In addition to working with governments and communities, Pathways expects front-end engineering and design on the proposed 400-kilometre-plus main transportation line and more than 250 kilometres of connecting pipelines to be complete by the end of this year.  

Pathways has also drilled two test wells in the proposed storage hub and plans to drill another two or three evaluation wells in the final quarter of 2024. 

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Alberta has strategic advantages in carbon capture and storage (CCS), a core technology to achieve carbon neutrality, says a director with the low-carbon energy think tank Clean Prosperity.

“I think it’s important for us to remember that we have the people, we have the geography and we have that great policy environment to be able to lead on CCS across the country,” Adam Sweet said during a recent webinar.

According to the International Energy Agency, 45 commercial CCS facilities are in operation worldwide.

Alberta has five operational CCS projects, which have stored roughly 14 million tonnes of CO2, and dozens more projects are in various development stages.

The province is situated atop the Western Canada Sedimentary Basin, which boasts an abundance of potential storage space for captured carbon.

According to a study by Clean Prosperity, Alberta has around 79,000 megatonnes of pore space available in underground saline aquifers and mature or depleted oil and gas wells.

“One of the main reasons why CCS is so big in Alberta is, frankly, we have the geology,” said Sweet.

In August, two new CCS projects in Alberta got the green light to proceed.

Shell and partner ATCO EnPower announced they will build a new CCS project at the Scotford refinery and chemicals complex near Edmonton, while on a smaller scale, Entropy Inc. will add a second phase of CCS at its Glacier gas plant near Grande Prairie.

Combined, the projects are expected to capture and store about 810,000 tonnes of CO2 per year, the equivalent of taking nearly 200,000 cars off the road annually. Entropy’s project is to start in 2026 and Shell/ATCO’s in 2028.

Sweet said that in addition to Alberta’s geological ability to store vast quantities of CO2 underground, the province has advantages including the Technology Innovation and Emissions Reduction (TIER) regulation, an industrial carbon price that has existed for nearly 20 years.

This regulation covers around 60 per cent of Alberta’s total emissions and around half of Canada’s total industrial emissions, according to Clean Prosperity. The ability to generate carbon credits makes TIER attractive for companies considering CCS.

“Those facilities that invest in carbon capture and storage and can reduce or can create these carbon credits by coming underneath the benchmark, they can then sell those carbon credits,” said Sweet.

He said that in addition to the TIER regulation, Alberta’s expertise and knowledge of energy production are another key asset that makes it an attractive jurisdiction for CCS.

“We often forget that we have knowledge and experience of working underground, as well as working with everything from the valves to the pipes and all the different pieces that exist in this low carbon energy economy.”

Government support is helping drive new CCS development.

Alberta is finalizing its carbon capture incentive program, which covers up to 12 per cent of eligible capital costs, while the federal government has implemented its CCS investment tax credit, which covers up to 60 per cent of capture equipment and 37.5 per cent of the cost for transportation, storage or usage equipment.

Both governments have supported CCS projects in the past: Shell’s $1.3 billion Quest project received $745 million from Alberta’s government and $120 million from Ottawa, while the $1.2 billion Alberta Carbon Trunk Line received $495 million from Alberta and $63.2 million from the federal government.

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When Dow, one of the world’s largest chemical producers, plans to commit billions to build a state-of-the-art new complex, it has a comprehensive checklist of factors to consider and a list of suitors around the globe competing for the investment.

In 2023, after a lengthy review, Dow Canada president Diego Ordonez says Alberta made the most sense as the location for a new US$6.5-billion net-zero scope 1 and 2 emissions petrochemical complex.

The plant, to start operations in 2027, will produce polyethylene, the most widely used plastic.

“Even without a coastline, Alberta is in a great spot. There is a real demand for its energy as feedstock to manufacture the chemicals the world needs to continue to prosper,” says Ordonez, a self-described “renegade accountant” who has spent 35 years with Dow across the globe.

“We have operations around the world, so you have a list of possible locations when you are looking at the conditions that are necessary for this type of facility. You need a reliable supply of the raw material ethane, which you obtain through natural gas, and it has to be cost-competitive today and in the foreseeable future.”

The project also needs a site with a proven safety and reliability track record, he says.

Alberta’s Industrial Heartland region, near Edmonton, ticked all those boxes – including proximity to the right geology and infrastructure for carbon capture and storage (CCS), he says.

Reducing emissions with carbon capture and storage

A “significant factor” that supported Dow´s decision to invest in Canada was the financial support committed by the Alberta and federal governments through Alberta’s Petrochemicals Incentive Program and Canada’s CCS Investment Tax Credit, Ordonez says.

Dow’s project will feature Canada’s largest “blue” hydrogen production facility, under a more than $2 billion contract signed in August with Linde Canada. “Blue” hydrogen is the term for hydrogen generated from natural gas with operations that include CCS to reduce emissions.

Linde’s facility will be built to capture more than two million tonnes of carbon dioxide per year, or the annual equivalent of taking about 475,000 gasoline-powered vehicles off the road.

World plastics demand to triple by 2060

Reducing emissions from petrochemical projects is important as demand for plastics continues to grow.

“Petrochemicals are the building blocks of modern society. Clothing, tires, digital devices, packaging, detergents, healthcare and countless other everyday items that enable modern life are made from petrochemicals,” says a new report from Wood Mackenzie, a global consultancy specializing in analyzing energy data.

“With growing global populations and rising income levels, demand for petrochemicals is projected to increase.”

The Global Plastics Outlook, published by the Paris-based Organisation for Economic Co-operation and Development, forecasts the use of plastics globally will nearly triple by 2060, driven by economic and population growth.

New ethane supply

The announcement of more petrochemical production in Alberta is supported by increasing ethane supply.

Pipeline operator Wolf Midstream announced in July it will invest $1 billion to expand the capacity of its northeast Alberta Natural Gas Liquids system, bringing up to 60,000 barrels per day of ethane needed that will help meet growing petrochemical demand.

“What we are seeing with these large-scale investment decisions is companies are comfortable with the value proposition in Alberta. We have created or are creating economies of scale,” says Mark Plamondon, executive director of Alberta’s Industrial Heartland Association.

“We have the lowest cost feedstocks in North America and are competitive in the world on price. But we also have appeal with our carbon capture and sequestration infrastructure so companies can achieve both economic and environmental objectives. It is a one-two punch that is a game changer for us.”

Policy matters

But policy matters as much as steel in the ground, something Ordonez sees as differentiating Canada from other jurisdictions with clusters of heavy industries.

“Canada has market-based carbon pricing at both the federal and provincial level. That was an essential piece for us to decide to invest,” he says. “There is nothing similar in place in the USA or the Middle East.”

And work by industry has also resulted in government and regulatory support to support new investments in petrochemicals.

“For these investments to take place, you need a good active collaboration between industry and government. We have seen that in Alberta, and it has resulted in significant investments for Alberta,” says Greg Moffatt, executive vice-president of the Chemistry Industry Association of Canada.

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