Photo: https://www.canadianenergycentre.ca/

The proposed Pathways Alliance carbon capture project is being sold as a nation-building solution. In reality it looks increasingly like a high-risk subsidy scheme with no clear payoff for the people footing the bill.

From the outset this has been a project built on public money. Industry’s ask has been explicit: governments cover the majority of the capital costs through tax credits, grants and financial backstops. That shifts the burden squarely onto taxpayers while allowing some of the largest and most profitable oil sands companies in the country to limit their own exposure.  If the project succeeds, the upside is private. If it fails, the losses are public.

The price tag alone should give pause. Early estimates of $16.5 billion have already ballooned into projections as high as $75 billion for a full buildout. 

That kind of cost escalation is not a rounding error, it is a warning sign. Large-scale carbon capture projects around the world have a track record of overruns, underperformance and ongoing dependence on subsidies. There is little evidence this one will be different.

Even more concerning is the lack of a firm business case. Analysts have been clear that without sustained carbon pricing and continued government support, the project likely does not proceed. That is not a viable private-sector investment. It is a policy-driven construct that exists only so long as taxpayers are willing to keep paying.

And despite years of announcements and political backing, there is still no final investment decision. Timelines have slipped. Construction has not begun. What exists today is not a shovel-ready project but a concept that remains stuck in the approval and negotiation phase while costs and uncertainty continue to grow.

The bigger problem is what this project is tied to. The Pathways proposal is increasingly linked to the idea of a new pipeline to the West Coast. Without that export capacity, the economic rationale for expanding oil sands production and building out an expensive carbon capture network becomes significantly weaker.

Here the political reality is unavoidable. No matter how strongly Alberta Premier Danielle Smith believes a new pipeline will be approved, the federal landscape is not aligned. A government led by Mark Carney is highly unlikely to approve a major new oil pipeline to tidewater, particularly through British Columbia where opposition remains entrenched at both the provincial and Indigenous levels. The history of cancelled projects and court challenges has not changed.

That leaves taxpayers exposed to a project that depends on infrastructure that may never be built. It is a classic case of putting the cart before the horse, except in this case the cart costs tens of billions of dollars.

There is also a fundamental question about the technology itself. Carbon capture has been promoted for years as a way to square continued fossil fuel production with emissions targets. Yet it remains expensive, energy-intensive and limited in its real-world impact. When lifecycle emissions are considered, the reductions are often far less significant than advertised. Pouring public money into an uncertain technology does not guarantee meaningful environmental results.

At a time when governments are already struggling with deficits and pressure on core services, committing billions more to a project with no clear timeline, no guaranteed infrastructure and no proven return is difficult to justify. This is not prudent economic policy. It is a gamble.

Taxpayers should not be the backstop for an industry-led experiment, particularly one that hinges on political approvals that are unlikely to materialize. Until there is a credible, fully private business case and a realistic path to the infrastructure it depends on, the Pathways project should remain exactly where it is now: on hold.