<article><p class="lead">"More Alberta, less Ottawa." That phrase is not new in Canada's leading oil province, and its stance on federal meddling will remain intact following the ruling United Conservative Party's (UCP) re-election last week.</p><p>Premier Danielle Smith led the UCP to its second win in Alberta, but it was her first triumph since becoming party leader last year. Her trial run has been extended by four years, and with two more years until a federal election, Smith intends to be a thorn in the Canadian government's side. Federal prime minister Justin Trudeau's environmental agenda is in her crosshairs, as she seeks more independence for Alberta on energy and climate policy.</p><p>Smith called out Trudeau and his Liberal Party in her victory speech, warning Albertans against the potential impact of previously unveiled greenhouse gas emissions caps. "The prime minister is already ready to introduce a de facto production cap on our oil and gas sector," Smith said, warning this would "damage our province's fiscal position and bring economic hardship to Albertans".</p><p>The federal government in 2022 unveiled targets for the oil and gas sector to reduce emissions by 42pc compared with 2019 levels by 2030, reflecting what the Liberals consider the industry's outsized contribution needs to become in order for Canada's overall emissions to fall to 40-45pc below 2005 levels. "I've made myself clear on this matter to the prime minister," Smith said. "But I feel we need to do it again." The Trudeau government, on the other hand, could benefit from a vocal and out-of-line antagonist in Alberta to help persuade federal election voters in 2025 that the Liberals' policies are the safe choice.</p><p>What remains to be seen is whether the Smith-Trudeau relationship will have any bearing on carbon capture, utilisation and storage (CCUS) plans in the province. This is one area where the gap between Alberta, Canada and industry has narrowed, giving hope to stakeholders that common ground will be found. The Pathways Alliance, a CCUS consortium of six of the largest oil sands producers, is viewed as a potentially important contributor to reducing emissions, as Canada pursues net zero by 2050. Pathways-related projects also represent big business for Alberta, at an estimated investment cost of 24bn Canadian dollars ($17.9bn).</p><h3>So long, partner</h3><p class="lead">One member of the Pathways Alliance is US independent ConocoPhillips, operator of the Surmont oil sands project. ConocoPhillips has chosen to exercise its right of first refusal and has bought the remaining 50pc stake in Surmont from TotalEnergies — ending Canadian producer Suncor's plans to buy half of the asset in an earlier deal. ConocoPhillips will become the sole owner of the 150,000 b/d heavy oil asset.</p><p>"Long-life, low-sustaining capital assets such as Surmont play an important role in our deep, durable and diverse low-cost-of-supply portfolio," ConocoPhillips chief executive Ryan Lance says, perhaps an indication that the oil sands are back in vogue. Its move may delay TotalEnergies' plans to leave, as the sale of its minority stake in the 194,000 b/d Fort Hills project — the other part of its deal with Suncor — is likely to be renegotiated, or possibly abandoned altogether.</p><p>For Suncor, the oil sands have always been the place to be, steadily growing its presence there through acquisitions. Large profits have recently given comfort to that strategy, and ConocoPhillips appears on board as Canadian crude producers start to enjoy something rare — stability. Historic pipeline constraints out of Canada are likely to be largely solved as more export capacity is on its way in the form of the 590,000 b/d Trans Mountain Expansion on the west coast. Stability in Alberta's oil sands is what many investors were lacking over the past decade, but one constant unlikely to disappear is the need to navigate Alberta-Canada politics.</p><p class="bylines">By Brett Holmes</p></article>
