Carney government is betting pipeline revenue on a carbon capture project whose price keeps climbing and carries environmental risks

Carney government is betting pipeline revenue on a carbon capture project whose price keeps climbing and carries environmental risks ANALYSIS 2 SEPTEMBER 2026 i ARTICLE SUMMARY KEY STATS A new study urges caution on the carbon capture network that Ottawa and Alberta have made as part of the price of admission for a new West Coast pipeline. The need for caution in the recent study, published by the Fraser Institute, takes a look at environmental risks, but it also raises fiscal ones too. “Environmental Risks of Carbon Capture, Utilization, and Storage Technologies” reviews the literature on what can go wrong when carbon dioxide is compressed and injected underground at scale, which is what the Pathways project intends to do. Injecting fluid underground at high pressure is a well-documented trigger for seismic activity, and the authors point to thousands of small tremors recorded at the In Salah storage project in Algeria that tracked changes in injection rates. They also point to large-scale saltwater disposal in North America, which they call the best real-world analogue available, where small pressure increases have set off quakes in formations connected to deep basement faults. Long-term monitoring at well-run storage sites has not detected damage to shallow groundwater, but modelling and laboratory work consistently show that leaks can acidify aquifers and mobilize lead, arsenic, and uranium. Controlled experiments show elevated CO2 in soil sharply cutting yields in crops. The authors’ central concern about the carbon capture, utilization, and storage (CCUS) project is its sheer scale. Pathways would be the largest such project in the world, and nothing of comparable size has been built anywhere. As proposed by the Oil Sands Alliance, the Pathways Project would gather emissions from 13 oilsands sites through 16 lateral lines into a CO2 pipeline network of more than 650 kilometres, then inject them into a sandstone formation one to two kilometres beneath the Cold Lake area. The Fraser Institute report cites risks outlined in Stanford research, whose researchers calculated that storage reservoirs must leak less than 1 percent per thousand years for carbon capture to deliver the climate benefit of renewables. Pathways was pitched in 2022 at $16.5 billion for its first phase. Both current estimates come from the companies building it, but show the cost already ballooning before its even underway. The Oil Sands Alliance put first-phase cost at $20…