November 27, 2025
In a long-awaited landmark move that could reshape the future of Canada’s energy industry, the Alberta government and the federal government signed a Memorandum of Understanding (MOU) today in Calgary. This agreement is being hailed as a potential turning point in federal-provincial relations and a major step toward rebalancing economic growth with environmental commitments.
For years, Alberta and Ottawa have been at odds over energy policy, carbon pricing, and environmental regulatory frameworks. Today’s MOU signals the potential for a new era of cooperation, and a move that may unlock billions in energy investment, accelerate infrastructure development, diversify and build capacity for markets other than the United States and provide clarity for industry stakeholders.
Key Objectives of the MOU:
- Pipeline of National Interest: Federal government declares an Indigenous co-owned Alberta bitumen pipeline to Asian markets a project of national interest.
- Pipeline Development Commitment: Both governments will facilitate application, approval, and construction of a privately financed, Indigenous co-owned pipeline (capacity: 1M+ barrels/day) to Asian markets via a strategic deep-water port.
- No Federal Emissions Cap: Ottawa commits to not implementing the oil and gas emissions cap, enabling major production growth.
- Clean Electricity Regulations Suspended: Immediate suspension of federal Clean Electricity Regulations in Alberta; parties will collaborate on AI computing infrastructure, including sovereign computing capacity.
- World’s Largest CCUS Project: Joint commitment with Pathways Alliance to finance and build the world’s largest carbon capture, utilization, and storage project, making Alberta bitumen among the lowest-emission heavy oil globally.
- Net-Zero Framework: By April 1, 2026, both governments will design and commit to globally competitive carbon pricing and sector-specific stringency factors under Alberta’s TIER system.
- Methane Reduction Agreement: Enter into a methane equivalency agreement by April 1, 2026, targeting 75% reduction by 2035 (relative to 2014 levels).
- Indigenous & B.C. Engagement: Immediate consultation with Indigenous partners and B.C. government to ensure substantial economic benefits for communities.
- Regulatory Certainty: Agreement to reduce regulatory uncertainty through legislative, regulatory, and policy changes.
- Economic & Strategic Goals: Increase oil and gas production and exports, maximize AI datacentre growth, support national security objectives, create hundreds of thousands of jobs, and reduce emissions intensity through CCUS, nuclear, and other technologies.
Politically, this agreement could potentially:
- Reset the tone of federal-provincial relations after years of acrimony;
- Provide certainty for investors and industry leaders seeking long-term stability;
- Advance carbon capture technology and emissions reduction strategies;
- Open new export opportunities through a proposed West Coast pipeline; and
- Strengthen Alberta’s position as a global energy leader while addressing climate goals.
The MOU is expected to trigger detailed negotiations and legislative changes in the coming months. While critics warn of environmental and Indigenous rights concerns, supporters argue this is a pragmatic solution that balances economic growth with climate responsibility. Opposition from the British Columbia government and Coastal First Nations also remains a key stumbling block.
We’re Here to Help
For more information and insights about what these developments mean for Alberta’s and BC’s political landscape, please contact:
Rick Fraser -Senior Strategy Advisor
rick@prairieskystrategy.ca
403.701.7584
Whitney Issik – Senior Strategy Advisor
whitney@prairieskystrategy.ca
403.815.2582
Leigha Parsons – Senior Strategy Advisor
leigha@prairieskystrategy.ca
403.650.8191
Line Porfon – Senior Strategy Advisor
line@prairieskystrategy.ca
780.803.6267
Mat Steppan – Vice-President
mat@prairieskystrategy.ca
780.236.1543
Jeff Sterzuk – President
jeff@prairieskystrategy.ca
403.612.1724
Ben Thibault – Senior Strategy Advisor
ben@prairieskystrategy.ca
587.897.6261
Richard Truscott – Vice-President
richard@prairieskystrategy.ca
403.998.0494
Ken Veldman – Senior Strategy Advisor
ken@prairieskystrategy.ca
250.600.0670
To learn more about Prairie Sky Strategy, please visit our website.
