No CCUS, No Pipeline: The $100 Billion Bet Behind Alberta's West Coast Oil Route

Canada's proposed West Coast oil pipeline is shaping up to be one of the most capital-intensive energy undertakings in the country's history, and carbon capture sits at the center of it. Imperial Oil CEO John Whelan, Chairman, President and CEO, put a number to the scale at the Calgary Energy Roundtable conference on May 28: more than C$100 billion (roughly US$73 billion) in total industry investment required to make Alberta's proposed million-barrel-a-day pipeline to British Columbia a reality.

That figure covers production growth to fill the line, shipper commitments, and a federally mandated carbon capture project. "The total cost is north of a hundred billion dollars that we will need to attract to this industry," Whelan said. "Now I think we can do that, but that's kind of the scale of what we're talking about."

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The carbon capture component Whelan referenced is the Oil Sands Alliance Pathways project, widely described as the largest CCS development in the world. The project is a condition of the pipeline, and the pipeline is a condition of the project. That interdependence was made explicit in the Canada-Alberta Implementation Agreement signed on May 15, 2026, by Prime Minister Mark Carney and Alberta Premier Danielle Smith, which committed both governments to advancing the CCUS infrastructure as a prerequisite for the new export route to Asian markets.

About the Pathways CCS Project

The Pathways project proposes a 650-kilometre pipeline network connecting 13 oilsands sites across northern Alberta to an underground CO2 storage hub near Cold Lake. The captured carbon would be injected deep into the Basal Cambrian Sandstone formation, roughly one to two kilometres below the surface, where a thick layer of non-porous salt rock seals it in place.

The Oil Sands Alliance, which includes Cenovus Energy, Suncor Energy, Canadian Natural Resources, ConocoPhillips Canada, and Imperial Oil, is targeting 16 million tonnes of CO2 captured per year by 2035. That target was revised down from the original 22 million tonnes by 2030 under the new implementation agreement, with a minimum of six million tonnes required to be operational by 2035.

CCUS as a Pipeline Condition

The Alberta-Ottawa deal is built on a hard link between the two projects: no CCUS progress, no pipeline designation. Under the agreement, Alberta must secure a private-sector pipeline proponent by July 1, 2026. The federal government must designate the pipeline a project of national interest by October 1, 2026, with construction potentially starting as early as September 1, 2027, pending Indigenous consultations and regulatory approvals.

Prime Minister Carney has described future oilsands production as dependent on the Pathways project, framing it as a foundation for what he calls "decarbonized barrels" of oil. The CCS project is estimated to generate more than $16 billion in economic output and create over 50,000 jobs across Alberta and Canada.

Financing Still Unresolved

Despite the momentum, the three-way cost-sharing arrangement between the federal government, Alberta, and the Oil Sands Alliance remains unfinalized. The federal government has committed to a 50% CCUS investment tax credit, and Alberta has agreed to a 25% grant, covering 75% of capital costs through public funding. Negotiations over the remaining 25% are ongoing.

The project's estimated capital cost has already climbed from the original C$16.5 billion to more than C$20 billion. Analysts at CIBC World Markets noted in May 2026 that the Alberta government's construction timeline is ambitious and that key elements, including the Pathways funding deal and consultations with British Columbia and Indigenous communities, remain open.

Brendan Frank, vice-president of policy at Clean Prosperity, called carbon capture and storage "probably the most cost-effective pathway for most industrial decarbonization in Alberta," reflecting the broader industry view that CCUS is not optional but central to oilsands expansion under Canada's climate framework.