The Audit

David Clinton

The Canada-Alberta Memorandum of Understanding is finally out. I’m certain that it was created with the very best of intentions, but I had serious doubts that anything here will have any impact on the economic and structural problems Canada faces. Well, at least not in most of our lifetimes.

Here’s what I asked my AI friend:

I’ve attached the recently-released Canada-Alberta Memorandum of Understanding. In the context of known opposition from the BC government, environmental activists, and first nations groups – and the general difficulties involved in completing any large infrastructure projects in Canada – how likely is it that the MoU will lead to any completions at all, and, if there are completions, that they’ll finish within a decade?

In case you’re curious, here’s the response I received:

Short answer up front — given the text of the Memorandum of Understanding you uploaded and the immediate political and legal context, the odds that the MOU as-written actually produces all its headline “big infrastructure” completions within a decade (i.e., by ~2035) are low. My best-effort, bottom-line probabilities (with reasoning and key milestones to watch) are below.

Quick probabilities (subjective estimates)

• A Pacific-coast bitumen pipeline (built and operating by 2035): ~20–35%.
• Pathways / large-scale CCUS Phase 1 elements in operation by 2035: ~35–55% (some staged components more likely than full buildout).
• Large transmission interties / major new nuclear for Alberta in service by 2035: ~15–35% (varies by type — some interties easier, new nuclear much harder).
• Large AI data-centre buildout in Alberta within a decade: ~40–60% (market demand + provincial incentives make this comparatively easier).

These numbers are probabilistic judgements, not precise forecasts; I explain the drivers, evidence and what would raise/lower the odds.

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Why I give those probabilities — the key factors

1) The MOU is politically ambitious but conditional and mutually dependent

The MOU explicitly ties the pipeline and Pathways CCUS together — each is described as a prerequisite for the other, and many deliverables hinge on future agreements and a proponent submitting an application (the MOU says a pipeline application should be ready by July 1, 2026). That circular dependency increases programmatic risk: if one falters, the other can be held up. (MOU text).

2) Strong, immediate opposition from B.C. provincial government and coastal First Nations

B.C.’s government and many coastal First Nations organizations have publicly rejected the concept of a tanker corridor and a new heavy-oil pipeline to the north coast. Those political and Indigenous objections are front-page headlines in the immediate aftermath of the MOU and will translate into court actions, regulatory fights, and sustained public campaigns. Those actors can and historically have delayed or stopped projects (see Trans Mountain & Northern Gateway precedents discussed in coverage).

3) Federal legal / regulatory mechanics are necessary but not sufficient

The MOU contemplates designating the pipeline under the Building Canada Act and potentially adjusting the Oil Tanker Moratorium Act, and it commits to streamlining approval timelines (target: approvals within two years). Those federal moves can shorten some federal timelines, but they do not erase constitutional duties to consult and accommodate Indigenous rights, nor do they prevent provincial rights/objections or judicial review. The Prime Minister’s office release makes the federal commitments explicit — but it also acknowledges the need for Indigenous and B.C. agreement.

4) Proponent, financing and market risk

The MOU relies on private sector proponents and large capital. Media coverage and industry commentary note that no firm proponent was publicly committed at signing, and the economics depend on long-term export markets for heavy oil and investor appetite for projects that require legal and political risk to be resolved — all of which raises the hurdle for a credible, financed project in short order.

5) Pathways CCUS is both a risk and an enabler

Pathways (the oil-sands CCUS alliance) is already a real industry consortium with technical plans and public materials; advancing its network could materially reduce political resistance by promising lower emission intensity. But Pathways itself is a very large, multi-party build that has faced skepticism about scale, timing and effectiveness. If Phase-1 CCUS components can be credibly built and operating within the next several years, it materially increases the political case for export infrastructure. The Pathways project pages show the planned CO₂ transport and storage infrastructure but also underline the scale and staging of the work.

How the main obstacles translate into timing risk

• Indigenous consent and litigation — Even with federal designation, opponents can seek judicial review; coastal Nations have stated they will use “every tool” to block tankers. Court processes, injunctions, and enforceable consultation obligations typically add several years. (This is a primary reason the pipeline completion probability is low.)
• B.C. provincial resistance — B.C. can use permitting, provincial laws, and political pressure; even if federal adjustments reduce regulatory friction, provincial opposition creates practical and reputational tolls that slow financing and construction.
• Financing and market risk — Global capital markets and corporate boards are sensitive to long legal/regulatory tails and climate reputational risk; that makes large oil export pipelines harder to secure finance for quickly absent strong de-risking measures (e.g., government guarantees/loan backstops, which the MOU references as possible).
• Technical & supply-chain scale for Pathways — CCUS networks are feasible technically, and industry has plans, but building a massive CO₂ pipeline, capture equipment at multiple facilities, and permanent storage facilities takes years to plan and permit. The MOU and government materials set staged timelines (Phase 1 staged 2027–2040), which implies only partial Phase-1 completion by 2035 in the plan itself.

What’s plausibly achievable by ~2035 (the 10-year horizon)

1. Some Pathways components (capture at specific sites and portions of CO₂ pipeline/storage) — plausible
   Because Pathways is industry-led and already exists as an alliance, it is the single most likely big-project deliverable to reach at least partial operation before 2035. Staged delivery is explicit in the plan and some member companies have capacity and balance sheets to advance work. Probability: ~35–55%. Pathways Alliance+1
2. A fully built, tanker-enabled Pacific export pipeline with coast loading and steady throughput by 2035 — unlikely without major concessions
   Given provincial and Indigenous opposition, the lack of a named proponent at signing, and the need to change or exempt parts of the tanker moratorium, a fully operational coast-loading pipeline by 2035 is low probability unless there are rapid breakthroughs in Indigenous co-ownership deals, provincial buy-in or unusually strong federal guarantees. Probability: ~20–35%. AP News+1
3. Large transmission interties and some AI data-centre growth — moderately likely
   These projects are politically less fraught (compared to a tanker corridor) and can be pursued with provincial cooperation and market incentives; Alberta’s pledge to incentivize data centres and interties makes early wins here more plausible. Probability: ~40–60% (data centres), ~25–45% (major interties completed by 2035).
4. New nuclear generation on Alberta grid by 2035 — improbable to aggressive
   Building competitive new nuclear (small modular reactors or larger) and connecting them in that timeframe is a stretch: licensing, sites, supply chain and cost are major hurdles. The MOU targets a nuclear strategy by Jan 1, 2027, but a full buildout by 2035 is ambitious. Probability: ~15–25%.

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What would materially increase the odds (what to watch for)

If you want to update these probabilities later, watch for these high-leverage events:

1. A named, deep-pocketed commercial proponent (Enbridge, TC Energy, a consortium) with a signed off-take/financing plan — immediate boost to pipeline odds.
2. Concrete Indigenous co-ownership agreements with key coastal Nations — this would be the single biggest political de-risking step.
3. A federal statutory amendment or explicit legal mechanism that resolves the tanker moratorium for a specific corridor, with B.C. accommodation negotiated — would reduce the B.C. veto risk.
4. Binding financing commitments or public loan guarantees (federal or provincial) for Pathways and/or the pipeline.
5. Courts rejecting key legal challenges early or conversely, successful injunctions that create long delays.

(Each of the above items would merit re-rating the probabilities substantially.)

Practical conclusion for someone deciding whether to count on these projects finishing in a decade

• Do not assume the MOU equals turnkey delivery. The MOU establishes intent, sets targets and commits to streamlining — but it leaves the hardest things (consent, a proponent, money, and provincial buy-in) unresolved.
• Expect staged, partial wins (some Pathways elements, more data centres, maybe one or two transmission projects) rather than a single dramatic coast pipeline and immediate tanker-enabled export corridor.