Naheed Nenshi, the NDP leader of Alberta’s Opposition, is accusing Premier Danielle Smith of a scheme that could increase power bills for Albertans “so she can build AI data centres for her foreign billionaire friends.” 

The comments come from a news conference organized by the NDP in response to reporting by The Narwhal on a leaked document — labelled a “cabinet report” and bearing the Alberta government logo — that appears to show the provincial government is planning to take control of Alberta’s natural gas pipeline system to increase both supply and demand. 

The document outlines plans to wrest regulatory control over the province’s main natural gas transmission line, called the Nova Gas Transmission pipeline, owned and operated by TC Energy, away from the federal Canada Energy Regulator, and to create two new government-owned corporations. One of those Crown corporations could force companies to build natural gas pipeline expansions based on government priorities, while the other could build and operate the pipelines itself. 

Those moves, according to the document, would raise prices on ordinary Albertans and businesses, but would bring in more royalties for the government. 

“Let me reiterate this: Danielle Smith is rolling out the red carpet for data centres, and that will cause higher electricity prices, and she doesn’t care if it spikes your electricity and your heating bills,” Nenshi said.

Detailed questions were sent to several Alberta ministries prior to publication of the original story, but the government did not respond by publication time. 

Late Friday afternoon, the office of Minister of Energy and Minerals Brian Jean sent a statement to The Narwhal in response to a follow-up email asking for comment on the original story.

“Governments routinely examine a wide range of policy, regulatory and legislative options when considering complex issues, and internal materials do not represent government decisions,” it said.

“An increasing number of project proponents across a variety of industries have raised concerns about accessing industrial quantities of natural gas in several regions of Alberta. We are working with industry, including the natural gas infrastructure owners, to better understand these issues and identify practical solutions that support future growth and investment.”

The document on which the reporting was based was leaked to The Narwhal by a source within the Alberta government, whose identity is being kept confidential due to personal and professional risks stemming from the leak. 

A note on trust, integrity and unnamed sources+

This story uses information from sources The Narwhal has agreed not to name. The Narwhal only agrees to keep names confidential when we believe two things. First, that the person we’re speaking with is putting themselves at genuine risk, either personal or professional, by sharing this information with us. Second, that the information they’re sharing is in the public interest. Our decision to do so is never made lightly. 

There are two types of unnamed sources. A confidential source is someone whose name we know, but aren’t sharing. We make multiple attempts to verify their identity and information with other sources. If we aren’t able to get a second source, we say so. 

An anonymous source is someone whose name we don’t know. It is incredibly rare for The Narwhal to publish a story with a completely anonymous source. In these instances, we don’t publish until we have verified the information shared with us with at least one other source. 

And again, these stories must be in the public interest. 

As Canadian governments become increasingly secretive, the courage of whistleblowers is to be admired. We value them greatly. At the same time, our promise to readers is The Narwhal will always make sure the facts are airtight. 

Have something to share? Send us a story tip.

The moves could cost billions of public dollars if the government builds its own pipelines, according to the document. The document estimates it will cost more than $160 million just to institute the changes and fight anticipated legal battles with companies such as TC Energy, or potentially First Nations. “There may also be litigation risk from Indigenous communities and organizations where they believe that they have not been meaningfully engaged from early on in any proposed projects,” the document reads.

Sturgeon Lake Cree Nation Chief Sheldon Sunshine said his community, which is fighting a massive data centre proposal in northern Alberta led by celebrity investor Kevin O’Leary, is “outraged” by the details outlined in the document, which he says he has independently reviewed.

“For years, our Nation has been fighting for meaningful consultation and effective regulation of hyper-scale data centres — including the massive O’Leary Project,” he said in a statement sent to The Narwhal. Sturgeon Lake Cree Nation is not specifically named in the leaked document.

“Now we find out that the United Conservative Party government is trying to artificially drive up the demand for natural gas to lure even more of these data centres to Alberta — all while knowing that this would trample our Treaty Rights and send electricity prices soaring for all Albertans.”

The document estimates building a pipeline to meet government expectations could cost as much as $6 billion. The capacity from that new pipeline could provide enough gas for six gigawatts of power generation for data centres, according to the document. A recently rejected AI data centre near Olds, Alta., would have required a 1.4-gigawatt power plant and used as much power each day as the City of Edmonton.

According to information on TC Energy’s website, the company has invested approximately $15 billion into the Nova Gas Transmission system since 2015, with double the capacity increases outlined in the document.

The document points to the need to feed natural gas to AI data centres as a primary motivation for the moves, but also highlights desired growth in the oil and gas sector, saying “the Government of Alberta is actively courting hyper-scale data centre capital and other investors.”

Nenshi, who said he has now seen the leaked document himself, was blunt. 

“This report makes it clear that their strategy all along was to do whatever they could to increase natural gas prices, to promote the government’s own bottom line due to their own fiscal mismanagement,” he said. The document suggests the moves could increase royalties to the government while consumers could end up paying higher prices for their natural gas and electricity bills under the proposed plan.

Document leaked by whistleblower for whom Canada affords little protection: expert

According to David Hutton, a senior fellow with the Centre for Free Expression at Toronto Metropolitan University, whistleblowers who leak sensitive information to the media run a considerable risk, from losing their jobs, friendships or families through divorce.

He said Canada is “back of the bus” when it comes to protections.  

“International experts have done surveys of various countries and rated them, and we come out at the bottom,” he said in an interview. The federal government has a whistleblower program, but Hutton said there’s never been compensation awarded through it. 

Provincial laws are similar to the federal protections, including Alberta’s, and “are really not of any value,” he said. 

He stresses how crucial it is for public-interest information to see the light of day. As The Narwhal has reported, this is becoming increasingly difficult in Canada as multiple levels of government tighten freedom of information legislation. 

“Research done over decades now has consistently shown that tips from whistleblowers account for usually more than 40 per cent of all of the frauds that are uncovered [globally],” he said, highlighting one aspect of information that is shared.

There is no indication of fraud in the leaked document in Alberta. 

The plans outlined in the document single out TC Energy, which owns and operates the largest gas pipeline system in the province, as a likely source for legal action pushing back against the plans, due to the impacts on its business. 

The company did not respond to questions for the original article or for this follow up. 

Nenshi said he has not yet spoken with representatives from the company after the revelations were made public, but intends to. 

“To actually say government wants to step in in order to hurt people, and that government is strong-arming a company to make billions of dollars in investments that they don’t want to make, with the threat of competing with them if they don’t?” he said. “That’s textbook bullying behaviour. It’s also bad economics and it’s bad business.”

Document points to constraints imposed by feds, says Alberta seeks to ‘achieve greater control’

The document points the finger not just at TC Energy, but also at constraints imposed by the federal regulation of the natural gas transmission network.

“Federal regulatory oversight … is now compounding Alberta’s gas access challenges,” the document reads, adding this oversight “has caused growing concern about the pace of infrastructure development for the [natural gas transmission network].”

The document suggests moving TC Energy’s Alberta pipelines back under provincial regulatory control and under the authority of one of the new government corporations.

Some pipeline networks within the province are already under provincial jurisdiction, including the ATCO distribution network that interconnects with TC Energy’s system. ATCO operates approximately 8,500 kilometres of pipelines in Alberta, whereas the Nova Gas Transmission pipeline, the province’s main natural gas transmission line operated by TC Energy, is about 25,000 kilometres.

“Without provincial regulatory oversight, the Government of Alberta is limited in its ability to compel federally regulated pipelines to invest in capacity expansions,” reads the document.

“Due to the federally regulated [natural gas transmission line] system being fully subscribed, the province cannot guarantee the timely expansion of gas transmission capacity required to support new demand.”

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Editor’s note: Go here to read The Narwhal’s story on the backlash that followed this investigation.

Alberta is so determined to usher in a wave of AI data centres and increase oil and gas production that it is considering rewriting legislation and creating government-owned corporations that would force private companies to invest in natural gas pipeline expansions — or allow the government to build and operate those pipelines itself — according to a document leaked to The Narwhal. It’s also willing to pay for any legal challenges that follow. 

The document — labelled a “cabinet report” and bearing the Alberta government logo — contains a broad swath of recommendations it indicates were prepared for the Energy and Minerals Ministry led by Minister Brian Jean, and says it was scheduled to be presented to a high-level cabinet policy committee on Sept. 10.

The document says private ownership of natural gas transmission pipelines is throttling growth and that “escalatory and direct measures are now required,” especially as “the Government of Alberta is actively courting hyper-scale data centre capital and other investors.”

The document notes Alberta risks losing investment from AI data centre companies if it can’t come up with “speed-to-market” solutions.

According to the document, the government has been in talks with TC Energy, which owns and operates Alberta’s main natural gas pipeline system, since 2024 in an attempt to force the company to invest in new pipeline capacity, but the company refuses to build based on “speculative demand.” TC Energy did not respond to detailed questions.

Talks with the company stalled, according to the document, after the company pitched a plan that would involve the province assuming more financial liability for the pipeline system and forcing higher rates on those who use it. 

“Discussions continued until 2026 and escalated with the premier’s involvement,” reads the document. “Extensive discussions with TC Energy [have] produced no viable solutions to date.”

The document is critical of TC Energy’s track record, saying the company’s “underinvestment in [natural gas] pipeline capacity has caused a market failure in the natural gas sector leaving key growth regions unable to access gas,” calling the result a “dysfunctional natural gas pipeline network.”

The document was leaked to The Narwhal by a government official whose identity is being kept confidential. The Narwhal has verified they are in a position that would likely have access to such a document. The Narwhal has not been able to independently verify the authenticity of the document, but Alberta’s lobbyist registry confirms TC Energy has been in talks with government officials regarding “increased support for gas market access,” as well as discussions on “strategic natural gas initiatives.”

A note on trust, integrity and unnamed sources+

This story uses information from sources The Narwhal has agreed not to name. The Narwhal only agrees to keep names confidential when we believe two things. First, that the person we’re speaking with is putting themselves at genuine risk, either personal or professional, by sharing this information with us. Second, that the information they’re sharing is in the public interest. Our decision to do so is never made lightly. 

There are two types of unnamed sources. A confidential source is someone whose name we know, but aren’t sharing. We make multiple attempts to verify their identity and information with other sources. If we aren’t able to get a second source, we say so. 

An anonymous source is someone whose name we don’t know. It is incredibly rare for The Narwhal to publish a story with a completely anonymous source. In these instances, we don’t publish until we have verified the information shared with us with at least one other source. 

And again, these stories must be in the public interest. 

As Canadian governments become increasingly secretive, the courage of whistleblowers is to be admired. We value them greatly. At the same time, our promise to readers is The Narwhal will always make sure the facts are airtight. 

Have something to share? Send us a story tip.

Detailed questions sent to the premier’s office, including for confirmation of details in the document, were sent to the press secretaries for the premier and the ministers of affordability and utilities, energy and minerals, jobs, economy, trade and immigration, and treasury board and finance. There was no response by publication time. 

There was also no response to an email and phone call to Vitor Marciano, the chief of staff to the energy minister.

Late Friday afternoon, following the morning publication of this story, the office of Minister of Energy and Minerals Brian Jean sent a statement to The Narwhal saying “Governments routinely examine a wide range of policy, regulatory and legislative options when considering complex issues, and internal materials do not represent government decisions.”

“An increasing number of project proponents across a variety of industries have raised concerns about accessing industrial quantities of natural gas in several regions of Alberta,” it added. “We are working with industry, including the natural gas infrastructure owners, to better understand these issues and identify practical solutions that support future growth and investment.”

According to the document, the full slate of proposals for cabinet consideration include taking regulatory control for the pipeline transmission network operated by TC Energy away from the federal Canada Energy Regulator, creating a Crown corporation that would guide pipeline construction based on government forecasting, and another Crown corporation that would oversee, or build and operate, its own pipelines. 

That would give the government the power to control some private investment decisions, including directing companies to build pipelines, and it could also make the government a direct competitor of companies such as TC Energy. 

The document argues the moves are necessary to rapidly build natural gas pipeline capacity to help increase oil and gas production and spur data centre growth. The government’s data centre strategy explicitly encourages the use of natural gas for power generation. 

Since the release of that strategy, the government has restricted AI data centre access to the provincial grid until 2028 because there is not enough power to fuel demand and keep the lights on. Developers are required to build their own power supply, which is currently restricted to natural gas power plants.

Albertans could be on the hook for hundreds of millions — or billions — to help support power for AI data centres: document

The moves could cost Albertans. 

The document is clear one of the main drivers of the plan, in addition to increasing the province’s oil and gas production, is attracting AI data centres to the province. “Alberta’s ability to attract and retain data centre investment depends on reliable access to natural gas service,” the document says. 

The recommended changes would result in “significant legal and cost impacts for the Government of Alberta,” according to the document, as well as likely result in “increases for utility ratepayers.”

The document notes Albertans may be “sensitive” to what it calls “any change in perceived affordability.”

The preliminary estimated cost of the proposed changes, including the planning and creation of Crown corporations and potential ensuing legal battles, could exceed $162 million, according to estimates in the document, but that does not include possible infrastructure costs.

The document estimates building a pipeline to meet government expectations could cost as much as $6 billion. The capacity from that new pipeline could provide enough gas for six gigawatts of power generation for data centres, according to the document. A recently rejected AI data centre near Olds, Alta., would have required a 1.4-gigawatt power plant and used as much power each day as the City of Edmonton.

The total cost includes anticipated litigation from TC Energy and other companies, including concerns over “significant claims for compensation” for “alleged expropriation of valuable contractual rights.” 

The document warns First Nations could also initiate lawsuits. 

The moves could also make things more expensive for residents and businesses by driving up the price of natural gas, according to the document.

“While low prices benefit customers (Albertans and industrial users), they limit provincial royalty revenues and can discourage natural gas investment by reducing producer revenues,” the document reads. 

“Increased natural gas demand could contribute to higher costs for households, businesses and gas-intensive industries, which could deflect stakeholder support.”

The document also notes “potential disproportionate impacts on seniors and rural residents can be mitigated by monitoring affordability and exploring mitigation measures specific to households and small businesses.”

The government’s aim is to almost double natural gas prices to support and expand production, which would increase the cost of electricity generation by up to 25 per cent, based on calculations in the document. 

It’s unclear exactly what that could mean for Albertans’ power bills, but those costs could be passed down to Albertans, who the document warns could be upset about government spending and increased costs. 

A recent analysis from the Pembina Institute, estimates the recently announced Meta data center near Edmonton could add $270 to $460 to electricity bills each year.

The document suggests government messaging could sell the plan to Albertans to “help strengthen social licence.”

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Updated on Sept. 13, 2026, at 2:11 p.m. MT: This article was updated to include a statement from the office of Minister of Energy and Minerals Brian Jean. The statement was received after publication of the article. No response was received to questions sent in advance of publication.

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The Coal Valley mine, nestled in the foothills of Alberta’s Rocky Mountains, is a sprawling 200 square kilometres and has been in operation since 1978. Three hours west of Edmonton, it stretches alongside Highway 40, forming a long, narrow gash that includes large open mine pits as well as areas in the process of being reclaimed. It’s part industrial, part moonscape, part nature. 

It has been closed over the years as markets dip — most recently for three months in 2025 — and it has moved tremendous amounts of earth and coal. Currently only one of its pits is active.

On paper, the mine looks bad. There have been 16 incidents in the past three years, almost all of which were spills into the creeks and rivers in and around the site. That makes it the worst existing mine in Alberta in terms of the number of infractions. But the company behind the mine says numbers don’t tell the whole story.

The mine operates under the name Prairie Mines and Royalty ULC, and is ultimately owned by Denver-based Westmoreland Mining, one of three companies that still operate commercial coal mines in Alberta. It was the only one to respond to questions emailed from The Narwhal for an article about infractions at coal mines. 

“We appreciate your questions and the approach you’re taking with this story,” Jon Heroux, Westmoreland’s director of external affairs, wrote. “I think we can do one better than simply giving you an interview over the phone or by email.”

This is not typical of Alberta’s coal mining companies, many of which seldom, if ever, respond to journalists’ requests.

A little more than a week later, company representatives spent a day driving two journalists from The Narwhal around the site.

Alberta government wants to bring industry back from the brink

Coal was once big business in Alberta. Rich seams were found buried in the mountains and foothills, and the Prairies offered easy access to lower-quality coal that powered local electricity plants for decades. As recently as 2018, coal-fired power was the main source of electricity in Alberta.

The Crowsnest Pass in the southwest boomed (and busted) alongside the black rock at the heart of its economy, bringing wealth but also disparity, which led to strikes and even communist agitation from disgruntled workers.

But the markets changed — changes in demand, swings in prices — and so did government regulations. As the industry waned in the south of the province, the 1970s government of former Progressive Conservative premier Peter Lougheed introduced restrictions aimed at preserving beloved landscapes — and the all-important water that trickles and surges down those rocky slopes.

Three decades later in 2024, the phase-out of coal-fired electricity — a significant source of air pollution and emissions — in Alberta spelled the end of strip mines near electrical power plants, which are now mostly powered by natural gas. But that phase-out still allows for some mining. Alberta produces both thermal coal, which is exported to places that still burn it for electricity or for industrial uses, and metallurgical coal, which is used in steel-making.

Today, just three large commercial coal mines are up and running (four if you count Dodd’s, a family operation that mostly serves individuals and farms). Coal Valley is one of two that produces thermal coal mostly used in factories abroad while the third is a metallurgical mine. 

But it’s not the end of the story of coal in Alberta, at least not yet. 

The current provincial government has opened the door to new mines in areas set aside by the Lougheed conservatives in 1976, and a new coal policy — a guide to where and when mining can take place — is expected this year. This follows five years of acrimonious debate and public backlash against opening the Rocky Mountains to new mines.

According to data from the Alberta Energy Regulator, the three existing mines have struggled to keep coal waste and sediment out of the province’s waterways, a key concern for Albertans wondering what will happen to the headwaters for the Canadian Prairies if they’re contaminated.

There have been 42 incidents in the past three years, almost all of which involve water.

Further south of the existing mines clustered in west-central Alberta, new metallurgical coal mines have been pitched for the traditional mining region near Crownest Pass. The water that flows from the rocky slopes there tumbles across an astonishing expanse of prairie clean through to Manitoba, providing habitat and hydration to ecosystems, helping to irrigate crops and slake the thirst of livestock, wildlife and humans alike.

Cavernous pits and tree-lined lakes

Inside the main office at Coal Valley, the smell of coal — like fresh asphalt — permeates the two-storey space, which sits next to workshops designed to handle repairs on towering mine dump trucks. The walls are adorned with colouring sheets showing mine workers, carefully filled in by local young students, some of whom have parents at the mine.

Inside a conference room a map of the mine is displayed under a glass top on the table. Here, Scott Sturm, Westmoreland’s chief operating officer, and Steve Love, the mine’s general manager, talk about operations and reclamation, water and regulations while pointing to areas on the map. Charles Reid, senior legal and government affairs counsel, asks that the conversations not be recorded.

They talk about how the coal on site doesn’t have high levels of selenium, a compound that’s harmful to fish and human health in high quantities and a key concern in the ongoing debate about the future of coal mining in Alberta. The lack of selenium is a simple bit of geochemical luck rather than the product of engineering or human ingenuity, but it helps the company set itself apart when discussing spills. Its claims are backed up by water sampling conducted for the company by an independent contractor. 

Before setting out for a tour of the mine, they talk about the incidents listed by the regulator, including areas where spills have occurred. 

One recent incident dumped sediment in a creek, the result of erosion from a roadway and a collapsed culvert. At the site of the spill, the system designed to contain the sediment is still in place: a floating yellow barrier. Today, it’s closer to shore and smaller in size compared to three months earlier — Sturm pulls out his phone to share a photo from the time of the spill.

Sturm, a white-goateed man who looks somehow built for coal mining, says another incident in April was the result of ice blocking outflow from the mine’s long stretch of ponds. Known as Coal Creek, the long, narrow series of ponds are where debris and contaminants settle as the water slowly moves through them, ultimately discharging into a small waterway. The ice, combined with snowmelt and heavy rain, overwhelmed Coal Creek, and led to the spill.

Those spills involved sediment. And even without some of the chemical pollution concerns experienced by other mines, it can still have an impact. Sediment-laden riverbeds can smother habitat and impact fish and insect reproduction, and there is always the risk of contamination from pollutants including arsenic and heavy metals.

The company is also under investigation by the Alberta Energy Regulator for an incident related to a spill from the same area in 2025, but details have not been released.

In a follow-up email after the tour, Heroux says Westmoreland is working on “permanent engineering improvements” to the facility and says the company measures water quality after a spill. Heroux says conditions remained within regulatory limits following the spill in April and noted the company monitors surface water at 47 locations throughout the mine, as well as groundwater, streamflow and wetland conditions around the site.

“​​We also sample 20 additional locations upstream and downstream of the mine and exceed a number of the minimum monitoring requirements contained in its approvals,” Heroux wrote.

The tour pauses at the cavernous Pit 26, the only area of the mine that is currently active, a deep hole in the earth with a massive digger pulling loads from its lowest depths. There’s also a stop at the storage area where coal is washed prior to shipping to Japan. Further from the active areas, a short walk down a gravel road leads to a lush-looking lake that was once a mining pit — known as an end-pit lake, it’s part of a reclamation process those leading the tour seem particularly proud of and eager to highlight.

That former mining pit, now called Sterling Lake, is open to the public, accessed via a hike and stocked with fish for recreational angling. It has not yet been certified as reclaimed nor has the land officially been passed back to the province.

Love jokes he’s been sampling drinking water for years to ensure it’s clean.

Is a better coal mine … good?

Driving through the mine, Love talks about the grizzly sow, Betty, who dens nearby and passes her unique colouring from one generation of cubs to the next. Out the window, the landscape shifts from areas replanted with fir trees, to deep pits and cuts in the land. Across the valley, clearcuts dot the hillside, which those on the tour are quick to point out are the result of logging operations and not mining — another industry, a separate problem, within view. 

The impacts on the land are clear and immense. The emissions when the product is finally burned, meanwhile, are out of sight.

It’s clear the staff at Coal Valley who spoke with The Narwhal care about the work, the site and the surrounding environment. The willingness of the company to reach out is critical to understand the nuance of its operations and its failures. 

The company is eager to point to how quickly it reports and responds to spills, and explain how those spills aren’t an apocalyptic deluge of wastewater sludge. That may be true, but it’s also clear the mine struggles to contain water not meant to flow into waterways.

The information provided by the Alberta Energy Regulator through its compliance dashboard is often unclear about the impacts of coal mining incidents. There are few details linked to most infractions beyond “sediment runoff and sediment to waterbody,” or a figure on how much sediment was measured on a given month or day. 

The regulator is also sparing in the use of enforcement powers, including fines, to deter violations. Only about $1.1 million in fines has been doled out since 2013 and more than 80 per cent were for one major incident.

Following the mine tour, Heroux said the regulator’s data can be misread. 

“The [Alberta Energy Regulator] compliance dashboard records reportable events and regulatory activity, but it does not necessarily explain why an event occurred, its environmental significance, the company’s response or the outcome of the regulator’s review,” he wrote. “Please remember that those distinctions are important when evaluating the figures.”

Not far from Coal Valley, mine operator CST Coal has been fined $53,000 for spills that took place over the past three years, and for failing to quickly report those infractions to the regulator. In one instance it waited days. The context and the failure to report contributed to the penalties, according to the regulator. 

CST Coal did not respond to questions from The Narwhal.

Driving home from the tour down Highway 40, following the length of the mine site invisible over an adjacent mound, there’s a comfort in knowing that it’s still possible to talk across divides and see firsthand where assumptions fall apart, and where they do not. 

But at the end of the day, there remains a lingering question the industry might not be able to overcome: given the impacts on the land, on water and on emissions that cause air pollution and exacerbate climate change, is it enough that a coal mine is striving to be better than its peers?

Updated on Sept. 3, 2026, at 2:35 p.m. MT: This story has been updated to reflect the fact that coal-fired electricity has been phased out in Alberta, not across all of the Prairies as was implied in a previous version.

Updated on Sept. 4, 2026, at 10:05 a.m. MT: This story has been updated to correct a photo caption that misidentified a plant as a dandelion.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Alberta has introduced new rules that will allow landowners to destroy broad categories of wetlands across the province without seeking government approval. It’s a move the province calls common sense and critics call worrying. 

“What I’m seeing is what I like to refer to as policy-based evidence making,” said Tracy Scott, who recently retired from his role as head of industry and government relations with Ducks Unlimited Canada, a wetland conservation organization.

The changes to the province’s Water Act will allow farmers to remove what are known as temporary and seasonal wetlands on private land to improve crop efficiency. Temporary wetlands are covered by water for a few weeks in spring or after a heavy rainfall, according to the government — they can be dips in the landscape where water naturally pools. Seasonal wetlands hold water for most of the growing season but dry out by the fall.

Previously, landowners had to pay for a detailed assessment of the impacts of such moves, and pay for wetland replacement costs. 

“Farmers should not have to spend thousands of dollars and wait on government approval to carry out routine work on their own land,” Grant Hunter, the minister of environment and protected areas, said in a news release. “We are restoring private property rights and getting government out of the way where it doesn’t need to be.”

That sort of language irks Kennedy Halvorson, a conservation specialist at the Alberta Wilderness Association.

“It’s a bit of deceptive messaging, kind of depicting these wetlands as if they have no value, they’re just a hindrance for our producers,” she said. 

“The reality is that these wetlands have a lot of ecological value. They’re basically the only other sort of water bodies that exist other than the rivers.”

Halvorson said there is plenty of scientific research to show wetlands help retain water in dry years, help prevent flooding, filter things like pesticides and herbicides, recharge groundwater and provide habitat. 

She says the changes put the vast majority of the remaining prairie wetlands at risk — approximately 94 per cent.

Wetland ‘benefits accrue to society’

Wetlands are among the most diverse ecosystems on the planet. They’re home to countless species of birds, bugs and animals. But rapid human development, including agriculture, has ravaged many wetlands.

Globally, experts estimate more than half the world’s wetlands are gone. In Canada, approximately 70 per cent of historic wetlands have been degraded or dried up. Three-quarters of what are known as prairie pothole wetlands have been lost to agricultural developments and some areas have lost 90 per cent of their wetland cover.

Alberta’s changes apply to a broad swath of wetlands classified as “non-permanent.”

“Whether wetlands are large or small, temporary or permanent, they all make a positive difference,” reads Alberta’s landowner guide to wetland policy. 

And they can be a nuisance for farmers trying to operate large machinery and increase crop yields.

“The changes will make it easier for farmers to cultivate, seed, spray, ditch, drain and infill on their own cropland without going through an unnecessary approval process,” the government said in a press release.

These types of wetlands cause “production inefficiencies,” Sarah Weigum, the chair of Alberta British Columbia Seed Growers Association, said in the government’s press release announcing the changes. “By managing these short-lived wet areas and reducing their impacts earlier in the season, it allows farmers to have greater efficiency in the field.” 

Scott, a farmer himself near Camrose, Alta., says working around wetlands is “not fun,” and he can understand some of the frustration for landowners. 

“The challenge here is that the benefits accrue to society, by and large,” he says. “The landowners bear the cost.”

Wetlands do provide agricultural benefits, too: they provide habitat for pollinators, nutrients for crops, pest control and contaminant filtering. They store carbon and help manage water flow during droughts and floods. Healthy wetlands absorb phosphorus and nitrogen, helping manage explosions of algal blooms.

In the past, provincial governments relied heavily on research and consultation to develop policy to protect wetlands, something Scott said this government has turned away from. 

“We do have a policy that I was heavily involved in, in 2013, that involved extensive consultation as well as review of the available science, of which there is a lot,” Scott said. 

“This change is, in my opinion, based on political favour.”

The office of the minister of Environment and Protected Areas and the office of the minister of Agriculture and Irrigation did not respond to questions from The Narwhal by publication time.

Halvorson said another element of the changes may mean wetlands that were established as part of the province’s wetland replacement program, which forced landowners or companies who wanted to destroy a wetland to pay to construct a new wetland in another location, could also now be destroyed without penalty.

“How do we ensure that those wetlands that have been funded to be restored or replaced aren’t now just also at risk of being lost or degraded?” she wonders. 

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Records from the Alberta Energy Regulator show coal mines struggle to prevent discharges of potentially harmful sediments into waterways, raising questions about impacts on water and wildlife as the Alberta government pushes to open more land to coal mining along the Rockies.

The Narwhal analyzed data from the regulator from the past three years and found there have been 42 incidents since 2023 tied to existing coal mines located in west-central Alberta, along the foothills and eastern slopes of the Rocky Mountains. All of those incidents are related to impacts on water. Many of the incidents were related to the release of sediment into nearby lakes and streams, which can be toxic for fish and other aquatic wildlife.

Of the 42 incidents, only six — 14 per cent — resulted in enforcement actions by the provincial regulator.

Going back to 2013, there have been 23 provincial enforcement actions levied against coal mines in the province, with total fines of just under $1.1 million. 

Almost all of the fines were tied to one incident, the Obed mine disaster, which dumped 670 million litres of wastewater into the Athabasca River about an hour east of Jasper, Alta. The mine’s owner was ordered to pay $925,000 in provincial fines (and $3.5 million in federal penalties), and the mine is no longer operating. 

Of the existing mines, Coal Valley, owned by Westmoreland Coal, is tied to the most incidents — 16 in total — in the past three years. The Coal Valley mine, near Hinton, Alta., produces thermal coal, used to create electricity and primarily burned in Japanese factories. But the mine’s owners say numbers alone do not tell the whole story. 

“One should consider the number of reportable events alongside their causes, environmental significance, the company’s monitoring and reporting practices, its co-operation with regulators and the corrective actions taken,” a spokesperson said in response to questions from The Narwhal. “This provides a better context for what is really happening at our mine sites.”

Coal Valley does not produce high levels of selenium

Westmoreland was the only company to respond to questions about regulatory compliance in Alberta. It also invited The Narwhal to tour the Coal Valley mine to provide more context for some of the incidents.

A significant distinction the company was eager to highlight was the fact the coal produced at its mine does not contain high levels of selenium — a claim backed up by independent environmental assessments commissioned by the company and submitted to the regulator. Selenium is a key chemical pollutant concern for most existing and potential mines along the rocky spine of the province. 

Coal mining can produce selenium, which is harmful to human and fish health if it accumulates in high quantities, as well as toxins such as arsenic, a key concern in the ongoing debate about opening new mines in the headwaters that feed rivers, lakes and streams across Alberta, Saskatchewan and into Manitoba. 

Groundwater and surface water assessments submitted to the regulator appear to show most water at Coal Valley is within guidelines for a host of contaminants, including selenium. 

Almost all of the incidents tied to Coal Valley are for exceedances of “total suspended solids” — an overabundance of debris and sediment — including one infraction in April in which the company was almost triple the allowable limit. 

The company said it was hit with heavy snow-melt that overwhelmed its systems. It also said it conducts extensive testing to evaluate potential effects and that those results “remained within applicable regulatory parameters following the event.”

The regulator, in response to questions from The Narwhal, says it will conduct its own testing “when required for enforcement activities.”

Climate change could exacerbate run-off and have significant impacts: retired government scientists

The Alberta government has waffled on its coal policy since first reopening Alberta’s Rocky Mountains to coal mining in 2020, prompting immense public backlash. It has since reinstated the earlier ban, but not before some exploration projects were approved, then it suspended those approvals and finally rescinded those suspensions to allow them to go forward as it prepares a new coal policy — anticipated this fall. A committee sought input from Albertans on a new policy in 2021.

As part of that process, some experts rang alarm bells related to heavy snow-melt akin to that experienced at Coal Valley.

Weather events overwhelming mine infrastructure is something a group of retired provincial government scientists warned about in a submission to Alberta’s coal committee.

“High snowfall run-off and major rainfall events have happened on a regular basis, often causing flows that were well above the levels that regulatory agencies and companies anticipated, included in modelling and for which infrastructure was designed and built,” wrote the five scientists. “This will be exacerbated by climate change making historic rainfall, snowfall and streamflow data increasingly out of date for planning and engineering purposes.”

Those same scientists warn that sediment and the chemicals used to treat waste “can be toxic to fish.” Sediment-laden waterbodies can also impact fish spawning and rearing, as well as aquatic insect production — food for fish. 

Katie Morrison, the executive director of the Canadian Parks and Wilderness Society in southern Alberta, says there’s a lot of focus on selenium because it has such a big impact and because no mine has ever successfully prevented it from entering waterbodies. 

“I don’t think there’s too much focus on selenium, but I do think the fact that there are many other contaminants that are released is sort of lost in that conversation a little bit,” she says. 

Westmoreland says it “conducts approximately 8,000 surface-water sampling events” each year at 47 different locations around the sprawling mine, as well as groundwater, wetland and biological health monitoring. 

“We also sample 20 additional locations upstream and downstream of the mine and exceed a number of the minimum monitoring requirements contained in approvals,” the company wrote after a tour of the mine site.

Coal Valley is not alone in releasing sediment into Alberta waterways. 

‘Enforcement action may not be required’

In 2023, CST Canada Coal Ltd., which operates the Grande Cache coal mine, released wastewater into the Smoky River for 17 hours and was ultimately fined $10,000 by the provincial regulator for the release and for failure to report it for more than seven hours. 

Again, the issue was total suspended solids, but the regulator makes it clear in its report about the incident that it’s not just a question of murky water. 

The run-off can release harmful chemicals even as it settles, and fine sediment can harm fish through gill abrasion and behavioural changes.

CST was also fined $23,000 in 2024 for dumping mine wastewater into the Smoky River after a sensor malfunctioned when a pond overflowed. The company did not report the incident for five days. 

The same company was fined $20,000 by the regulator in July for another incident in 2024, which dumped at least 1 million kilograms of sediment into Sheep Creek, although the exact quantity is not known. The total suspended solids were 1,920 times the regulatory limit on the day of the release. According to the regulator, the company didn’t report the incident for more than 22 hours and when it did, it withheld important details. 

The causes of the spill included high rainfall and “known drainage problems” at the mine. 

An inspection by the regulator showed “elevated levels of metals and polycyclic aromatic hydrocarbons” with potential risks to bull trout spawning habitat, although that risk was listed as “unlikely.” 

The Alberta Energy Regulator, in response to questions emailed by The Narwhal, said it takes into account several factors when determining whether to fine a coal company for violations. 

“If the operator is compliant and responsive in early stages to mitigate and address incidents, further action may not be required,” wrote an unnamed spokesperson. “Also, if there is no emergency phase and little or no impact to waterbodies or wildlife, enforcement action may not be required.”

The regulator will issue orders to companies to fix an existing issue or try to mitigate impacts, issue warning letters to force compliance or, as in one case involving the Obed mine disaster, prosecute a company in court. 

“The tools we use depend on the significance of the noncompliance,” the spokesperson wrote. “We keep a record of every company’s compliance and enforcement history. If a company purposely (or repeatedly) fails to follow the rules, our enforcement actions will escalate, and the consequences will become more severe.”

Morrison says it’s not about simply punishing companies for non-compliance. 

“I don’t think we’re saying, ‘Hey, we need to immediately close down the operating mines,’ but we do need to still hold those operating mines to standards,” she says, adding there also has to be a clear path from an incident to enforcement. 

“But I think more than that, we don’t want to just penalize companies for infractions, we want to prevent those things in the first place.”

The chemistry of coal

James C. Hower has been studying coal for more than 50 years and is a research professor at the University of Kentucky. He says there’s a lot to consider when assessing the impact of coal mining on the environment, including the type and grade of coal, as well as individual companies and the regulations in place. 

“We’ve got plenty of examples in the Appalachians of people who have mining companies that, in general, are good operators and seem to be doing things the right way, and then something goes wrong,” he says. 

He cites flooding as a major risk to a well-ordered mine operation. And while he doesn’t study Alberta in particular, he says concerns over water quality are legitimate, particularly for ranchers in the south of the province, where new mines are being proposed. 

A key factor, he says, is ensuring contamination does not get out of control so that reclamation is possible.

“If it’s done wrong in the first place and things get out of hand, you got a big problem,” Hower says.

Land-use planning is supposed to precede new coal policy: conservation advocate

The province is expected to unveil its new coal policy this fall, outlining new rules for where and when a new coal mine can operate. The policy is the outcome of years of on-again off-again restrictions on coal mining in the Rockies, particularly in sensitive areas to the south. 

The policy follows public consultations by a government commission that made numerous recommendations including the need for robust land-use planning, which considers cumulative impacts from other industries and users, ahead of any coal policy that could allow new mines to operate. 

“That hasn’t happened,” Morrison says. “So they are already going ahead with a coal policy without that land-use planning.”

She says the risks to the landscape, the environment and even to coal companies, is too great to allow new mines in the province. 

“It also doesn’t make sense from a company side to say to companies, ‘Yes, you can come and pitch a project here,’ knowing that it’s actually not going to be compatible down the road if our regulatory system was working as it should be.”

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Alberta can issue grid alerts when electricity demand threatens to outstrip supply — i.e. there’s risk of a blackout. This can happen for a number of reasons. 

A warming planet, with warmer summer months, can have you reaching for the AC remote. Our phones need charging and fridges need to stay plugged in. Add to the grid the data centres Alberta wants to build so we can ask our AI agent of choice to respond to our emails. The list goes on and on. 

And as much as the province would like to say it’s because of renewable energy projects, the data tells a different story. Prairies reporter Drew Anderson breaks it down in our latest video.

Want to make sure you don’t miss our latest work? Subscribe to our channel on YouTube and follow us on TikTok.

Thanks for watching!

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Assar Grinde is the kind of man whose calm is infectious, even as he rattles off an encyclopedic knowledge of facts about drought, water and the impacts of fracking on the region he calls home. A cattle rancher by trade who studied geology at the University of Alberta, you get the sense he’d rather be tending his herd than fighting with regulators and oil and gas companies.

But on a Sunday in early July after a morning on the ranch, he sits in the back of his friend Daniel Iseli-Otto’s truck, sporting a sweater knit by Iseli-Otto’s mom, and talks about the reasons he can’t just walk away.

It started three years ago when Lloyd Creek — a tributary of the Blindman River, which runs through the land Grinde’s family has ranched for generations — dried up. It was something he’d never seen before and he says the oil and gas companies were still pulling water from the river.

“We wanted to make sure that the river didn’t dry up because we thought that was crazy,” Grinde says.

He and Iseli-Otto helped found the Blindman River Watershed Society and dove into the labyrinth of data used by the Alberta Energy Regulator and the equally bewildering bureaucratic divisions of the provincial government.

It’s a funny time to be talking about the stress on the Blindman River watershed and the concerns he and Iseli-Otto have when it comes to the vast quantities of fresh water being used by oil and gas companies for hydraulic fracturing, or fracking.

The fields around Rimbey, Alta., about 200 kilometres north of Calgary, are saturated in surreal hues of green, stark against the grey skies of an abnormally wet July that has brought much-needed rain.

It’s a far cry from the drought-like conditions of May and June, conditions that have become all too common in a region suffering through a decade-long dry spell.

But the sudden rush of water isn’t enough to quell the concerns of area ranchers and residents who watched that creek run dry and their drinking wells drop. They say the rain isn’t enough to make up for how much has been lost from the aquifers — the deep underground natural reservoirs that feed those wells.

And then there’s the issue of oil and gas companies using billions of litres of water to crack open the earth beneath those green fields and exploit one of the hottest gas fields going, the Duvernay. They take surface water when there isn’t any to spare, and a fleeting moment of plenty might only make it worse, according to landowners who met with The Narwhal.

Grinde says promises were made by those companies, but rarely kept.

“ ‘We’re going to be taking the water at high flows when there’s too much of it, and we’ll store it and then use it when we need it.’ That was the industry’s sales pitch,” he says, driving through the region southwest of Edmonton along with Iseli-Otto. “But then we’ve been in a drought eight of the last 10 years, and they are still pulling water down.”

Dana Kreil, the chair of the nearby Medicine River Watershed Society, and a councillor for Lacombe County, says there’s no trust in the province to monitor the water and to intervene. Her society has bought its own monitoring equipment and is pressuring the government for solutions.

“You can’t fool the locals,” she says, making it clear she’s speaking for the watershed society and not the county. “There are people telling me the top of their runners wouldn’t get wet in that river. So you can’t tell me that those are acceptable levels for pumping from there.”

‘You only get conflict when there’s scarcity’

The Blindman River, as well as the Medicine, aren’t among the great waterways of the world. With enough momentum, it wouldn’t be hard to leap from one bank to the other. They are slow and meandering, but they are critical to ranchers and farmers.

They are also tenuous.

Neither river is fed by the mountain glaciers to the west. They rely instead on spring runoff and underground aquifers to keep water flowing. This year’s early-summer drenching is an indication of the feast and famine cycles expected to be the norm as the climate shifts — droughts with sudden onslaughts of rain. Grinde says his ranch received almost as much rain in June as it did the entire year previous.

For decades, fracking companies here have been injecting water deep into the ground to break up rock holding gaseous wealth in tight crevasses. That water, vast quantities of it, is almost entirely permanently lost to the water cycle as it remains trapped in the reservoirs that previously held gas. The practice was largely accepted by area landowners, but then water became scarce and drilling activity increased.

“We haven’t had to care about fresh water because we never had this issue before,” Grinde says. “You only get conflict when there’s scarcity, and you have that imbalance between supply and demand, and that’s really what’s happened in the last few years.”

Once Grinde and others started paying attention, they discovered a system of what they say is weak oversight, weak data and regulatory capitulation.

Water use is overseen by both Alberta’s Environment Ministry and the energy regulator — depending on who’s using the resource — and Grinde says it leads to a lot of plausible deniability. Water monitoring in the area is based on a federal government sensor 50 kilometres away in Blackfalds, Alta., but Grinde says it doesn’t actually measure the flow of the river, just the water pressure. Even if it did, Grinde thinks the minimum flows established by the province to determine when a company can pull river water for fracking are too low.

The Alberta Energy Regulator did not answer a question about the monitoring situation on Blindman River, but said monitoring is used to inform when a company can divert water. It noted that monitoring can be seen on the Alberta Rivers site.

The regulator says companies are responsible for measuring flow if there is no station nearby.

“So then that kind of led us down this path of trying to figure out: ‘Do you guys have rules around it?’ ” asked Grinde.

For some in the area, the answer is more uncertain than they’re comfortable with.

Company wants to pull billions of litres from critical freshwater aquifer

In March, Spartan Delta, a fracking company operating in the area, applied for a water licence to pump a maximum of 475 million litres of water per year — about 2.4 million bathtubs’ worth — from the Paskapoo Formation, a vast underground freshwater reservoir that stretches south past Calgary and north past the Athabasca River near Fox Creek.

That raised red flags for those in the region already worried about a strained system.

Grinde wants the government to prevent oil and gas companies from accessing shallow fresh groundwater for fracking, implementing a ban now so that it doesn’t have to draft new rules in the midst of a full-blown crisis.

“Right now [the companies] say, ‘Well, we don’t have any more surface water available to get licensed, we’re just going to start drilling shallow groundwater wells,’ which is really concerning because we don’t know enough about the groundwater, and it’s so vital to everybody who’s living here,” he says.

Tens of thousands of wells tap into the aquifer for drinking water, as do towns across Alberta. According to a report by the federal government, the Paskapoo “supports more groundwater wells than any other aquifer system in the Canadian Prairies,” making it “the most significant supply of groundwater” in the whole region.

That same federal report — published almost 20 years ago — also cautioned the aquifer is slow to recharge and the amount of water that can be pulled from the aquifer might be limited and may have already been exceeded in 2008.

Spartan Delta already pumps water from the Medicine River, with hoses stretching along ditches and culverts throughout the region pulling water into massive reservoirs. It also uses recycled water from its operations, but that only accounts for approximately 10 per cent of its use.

In 2024, the latest year of data from the Alberta Energy Regulator, Spartan Delta used approximately 171 million litres of fresh water for fracking. Its latest application shows the company estimates it will need much more than this, around 1.5 billion litres per year for the next 10 years.

The company did not answer emailed questions but sent a statement instead, saying it is focused on “responsible, sustainable development of oil and gas.”

Spartan Delta said it adheres to all rules and regulations set out by the regulator, Alberta’s Environment Ministry and local bylaws.

“All of our water use is determined by Alberta Environment,” reads a portion of its statement. “The company receives temporary diversion approvals, term licences and has undergone several audits to validate we are in compliance with all of the terms of the water approvals. All resident concerns are evaluated by the appropriate regulating body of our activities during the approval process.”

The regulator also did not directly answer questions emailed by The Narwhal, but did provide information on water use. An unidentified spokesperson said the regulator reviews all water licence applications and considers risks to individuals and the environment. The spokesperson added there are restrictions on water use if levels drop below prescribed thresholds and that restrictions can also be implemented in response to “landowner concerns.”

Analysis on aquifers is conducted by hydrogeology experts, the email said.

Though landowners are concerned about Spartan Delta’s water use, the company is a small player compared to others.

Parallax Energy Operations used almost one billion litres in 2024, while Canadian Natural Resources Ltd., one of the largest oil and gas companies in Canada, used 2.9 billion litres of fresh water for operations across the province. Overall, fracking consumed 20 billion litres of fresh water in 2024, up sharply from the seven billion litres consumed in 2013.

Grinde’s goal is to prove to the province and the regulator that the aquifer is dropping, realizing that officials could just turn around and say, well, it’s a drought.

“But even if it is a drought, the volume of water that the companies are using for fracking is accelerating that,” he says. “It could be that if there’s only a certain amount of water, you have to justify the use for certain things, right? So maybe you have to talk about hierarchy of use.”

Time and again, Grinde, Kreil and Iseli-Otto talk about the amount of work required to collect information, to get in touch with provincial officials, to make someone listen. Without decades of data, the response from officials and companies is: prove it.

“It’s the province’s job,” Kreil says. “It’s not the watershed society’s job. We’re volunteers.”

The provincial government did not respond to questions emailed by The Narwhal.

Alberta ranchers say their bison herd collapsed when a fracking company moved in

It’s easy to look out across the fields and patches of trees and imagine the landscape in central Alberta is largely unchanged, but Iseli-Otto, who works as a carpenter and has lived here his whole life, looks out his truck window and remembers bush where fields now stretch — a child’s wilderness transformed into cropland. It’s a reminder of how quickly things can change. How the immutable becomes a memory.

The change can be slow, or it can come on in a relative blink.

Tucked into a secluded corner of the countryside, is the home of Butch and Nicole Smith, two bison ranchers who have lived and worked in the area for decades, with the dream — shared by one of their daughters — of passing their ranch to the next generation.

Inside the home, a stuffed cougar looks down from its final perch above the kitchen, and the walls are covered in framed rodeo photos showing the victories of the family’s horses. Tail Light was the “team roping heading horse of the year.” Hickory, the “2011 pole bending horse of the year.” Their daughters have won an astonishing number of championship rodeo belts and saddles, all of which are on display.

A hint of the Smiths’ directness, and their frustration, comes in the form of a small sign by the kitchen table: “What (and I can’t stress this enough) the f*ck,” it reads.

Over bison burgers and sausages, the Smiths talk about how Spartan Delta cleared the land across from their feedlot and built two massive reservoirs two years ago to store the vast quantities of water the company pumps. They talk about how construction and pumping for the reservoirs, which bisect a wetland, led to startling changes in their bison herd.

“We started seeing the wildest behaviour from them,” Nicole says. “They’re very habitual animals.”

The herd was refusing to move to the areas they usually feed, and there was a sudden drop in their herd.

Nicole says they had 240 pregnant cows in the fall of 2024, but only 194 live births.

“We had many dead calves, aborted calves and calves that starved as stressed mothers produce not enough milk,” she says.

The Smiths blame the stress of the industrial activity and the disruption to stubborn routines.

The Smiths, however, aren’t the types to sit back and watch. They say they’ve spoken with their MLA, Jason Nixon, with the premier, with two environment ministers — Rebecca Schulz and RJ Sigurdson — and Energy Minister Brian Jean. They are working with Ecojustice, an environmental legal outfit, and were invited by the Alberta NDP to sit in the legislature last spring after speaking with MLA Nagwan Al-Guneid.

Now, after two years of fighting, they’re losing faith and plan to move.

“Neither one of us is a — how do I say it — a sitter arounder. I’m not gonna sit here and be miserable. I can’t even walk anymore because both ways just reminds you of all of it,” Nicole says.

“I’m raging when I hit the end of my driveway — every single time.”

‘There’s very little oversight right now’

Tensions are high in the region where fracking butts up against homes and ranches. In early July, a rumour spread that some of the hoses that pump water from ponds and rivers were shot at, but the Alberta RCMP said there were no reports of an incident on that day. Perhaps most telling was that none of the people who spoke with The Narwhal seemed surprised, although no one supported the idea and warned of the danger of puncturing the high-pressure lines.

There is a real sense that landowners have been abandoned in favour of oil and gas.

Kreil, whose society includes representatives from eight municipalities, including Red Deer, Lacombe County and Sylvan Lake, said the group recently met with the minister of Environment and Protected Areas and the CEO of the Alberta Energy Regulator to talk about the stress on the watershed. In its presentation, the society noted more than half of all fresh water in their watershed is allocated for oil and gas. Temporary water licences are almost entirely for fracking.

She says the minister told them to write a resolution calling for policy changes through the Rural Municipalities of Alberta — an organization which represents towns and districts across the province.

“I think he felt that he had dealt with us enough to say: ‘Write a resolution,’ ” she says.

Kreil stresses she’s not opposed to oil and gas, or to fracking in particular, but there has to be a balance.

“When we went to the minister, we said we want some solutions,” she says. “We’re not just coming here to bellyache and complain.”

Her organization wants to see more wastewater treated and reused, including municipal wastewater, to reduce or eliminate fresh water use. It wants better data on the state of the watersheds and a better understanding of drought and its impacts. And it wants new regulations governing use by agriculture, oil and gas and municipalities.

But those critical of the way fracking companies are operating all point their finger at the regulator when asked what the biggest problem is. The rules are weak and out of touch, responsibility is passed on and there’s no enforcement, they say.

“The problem with the Alberta Energy Regulator is there’s very little oversight right now,” Kreil says.

Iseli-Otto says he tried alerting a contact at the regulator about companies pumping from the Blindman River in May when the water levels were worryingly low, but nothing came of it.

Two days later, he was driving home and the pumps were running.

“So I texted him and I said, ‘Hey man, pumps are running, what’s going on? Why is this happening?,’ ” he says. In screenshots of the text messages shared with The Narwhal, Iseli-Otto then asks if someone from the regulator had checked to see if the pumps had stopped.

“That’s the point at which I got the automated text message saying this number is not monitored.”

Alberta pushes to double production, build pipelines

The regulator is an arms-length government body, but that doesn’t mean it’s entirely independent. The government sets the overall policy direction for the regulator to follow, for example, and the government appoints the regulator’s board of directors.

Recently, it appointed David Yager to the board, a long-time friend of Premier Danielle Smith who also acts as one of her special advisors, and tasked him with overseeing a revamp of the organization.

There have also been revelations of direct intervention from the provincial government into regulatory decisions.

And the direction from the government is clear: it wants to double oil and gas production and it’s willing to incentivize companies to do so, even as it helps finance a new pipeline to the West Coast.

With the push for more production and without more stringent rules on water use, the problems in the area are likely to continue, or increase.

“We’ve had companies tell us ‘We’re not doing anything differently until the government tells us to,’ because it’s a competitive industry,” Grinde says.

“We said to the minister, as long as this is free, they will never change,” Kreil adds.

But in the end, something has to give, she says.

“You can’t be running the people out of water for oil.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Summary

• The Alberta government is hoping to attract $100 billion worth of data centres to the province over the next four years. If built, the data centres would require enormous amounts of electricity to operate.
• With a cap on how much electricity data centres can purchase from the provincial grid, most will have to generate their own power by burning natural gas, a fossil fuel.
• A global surge in demand for natural gas plant infrastructure is driving up costs and extending wait-lists, calling into question how realistic Alberta’s data centre ambitions are.

The Alberta government has big ambitions for AI data centres, but those dreams will have to contend with the harsh reality of a heated global competition for electricity. 

Around the world, there is a shortage of turbines used in natural gas power plants, as more and more electricity generation is built to feed hungry data centres. Estimates for wait times to obtain the critical components are now upwards of five years. Prices have also increased dramatically. 

That has serious implications for Alberta’s plan to attract $100 billion worth of data centres over the next four years, not only in terms of how quickly the facilities can be built, but also at what cost. 

As if to drive the point home, the province joined private industry on July 2 for the announcement of the $4.6 billion Greenlight natural gas power plant, which is 2.6 times more expensive than a similar sized power plant completed by the same company two years ago. That plant will feed electricity to a $15 billion Meta data centre.

“We’re definitely seeing the impact of that turbine supply crunch,” Will Noel, senior electricity analyst with the Pembina Institute, says. 

These power plants burn natural gas, a source of the potent greenhouse gas methane, to spin turbines that generate electricity. Natural gas power generation accounts for approximately 77 per cent of Alberta’s electricity grid.

The turbine shortage comes on the heels of the province’s overhaul of its electricity market, a move that has stalled power plant investment as companies wait for more certainty before committing. It also follows the government’s crackdown on renewable power generation, which decimated the market for wind and solar in Alberta.

Data centre developers face lengthy waits and a highly competitive process if they want to connect to Alberta’s grid, but can move quickly if they build their own power supply — which the grid operator requires to be natural gas, at least for now. 

The operator, in response to questions from The Narwhal, said that’s because developers must be able to meet their power demand at all times.

“Renewables and stand-alone storage are currently excluded because of weather dependency and duration limitations,” a spokesperson said by email. “As of now, they are not qualified to reliably offset a data centre’s around-the-clock draw the way dispatchable gas generation can.”

New technologies could change that, according to the operator. 

If the proposed data centres don’t already have their turbines ordered, it’s going to be a long wait. 

Noel says we don’t actually know how many of the 41 data centre centre proposals in Alberta as of July 7 have finalized designs and parts on order. It’s also not known if any will eventually connect to the grid. 

“This is obviously speculation,” he says, “but I imagine most of these data centres don’t have turbines ordered.”

The global turbine shortage

Across the world, but particularly in the U.S., data centres are being built at a furious pace. That, along with a broader turn to electrification and production challenges, is creating a bottleneck for turbines and additional power plant components. 

A report from Bloomberg says the cost of building a natural gas plant in the U.S. increased 66 per cent between 2023 and 2025, while the time it takes to complete construction has increased 23 per cent in the same time period. 

The pressure to build and the lack of components is creating bidding wars on turbines and swelling the bottom lines for turbine manufacturers.

GE Vernova, one of the few large-scale turbine suppliers, saw significant growth last year and into 2026, and has a backlog of orders that account for 100 gigawatts of potential power supply. (For reference, that’s nearly one-third of the electricity the entire city of Calgary uses in a year.) 

All three of the major turbine suppliers are reporting delays.

That supply crunch has led some data centre developers in the U.S. to go to extreme lengths to get power, including repurposing old jet engines. 

Noel calls those fixes “inefficient and very costly,” but notes “the revenue they’re getting from the data centres is outstripping the extra cost, so they’re just kind of doing what they can to get any power on site as fast as possible.”

In Alberta, a power surplus could quickly evaporate

There is nothing to that extent happening in Alberta, which quickly instituted a hard cap on how much power was available to data centres from the existing power grid.

The Alberta government has embraced the AI boom as a way to increase demand for the province’s vast natural gas reserves. 

“Jurisdictions that can provide reliable and affordable power will have a serious advantage in attracting investment, and with our vast natural gas resources and mature industrial infrastructure, that is exactly what Alberta can offer,” Premier Danielle Smith said while announcing the recent Greenlight project.

The Alberta Electric System Operator, which manages the province’s private grid, allocated 1.2 gigawatts of power for data centres in a competitive process that ended with two developers allowed to tie into the grid. 

Another round will dole out additional power and the system operator recently announced data centre developers planning to build their own power plants could temporarily tie into the grid while those plants are being built, up to 1.6 gigawatts. 

The operator said by email that the “bridging provision” is a “general mechanism accommodating a time gap (up to three years) between a load being ready to operate and its generation being fully built and in service for any reason.”It is up to the developer to ensure it has the necessary power after that three-year window and if there is a power shortage during those three years, data centres using the bridging provision would be the first to have electricity curtailed. 

The province also has a healthy cushion of extra power after a buildout of capacity prior to market reforms and a renewable crackdown. But that won’t necessarily last. 

Noel points to the insatiable data centre demand and resulting supply crunch, combined with population growth and increasing electrification as pressures on the system. 

“And then we’ve got the old coal plants that were converted to run on gas — those are coming up soon on their end of life,” he says. “So I think mid-2030, if we don’t kind of deal with this now — whether it’s more gas or more renewables or whatever — I think there’s a real possibility that we will go from flush with power to just scraping by again.”

The office of Alberta’s minister of affordability and utilities, RJ Sigurdson, didn’t reply to specific questions about the turbine shortage and its impacts, but said the government prioritizes the “well-being of Albertans” and “will not compromise the reliability or affordability of the electricity that millions of Albertans, Indigenous communities and our local industries depend on.” 

The minister’s office said the government “does not prescribe a specific generation technology for powering data centre projects.” It said the decision by the grid operator to limit generation to natural gas at this time is an independent decision by the arm’s length body. 

The Alberta Electric System Operator says its role is to ensure the safety and reliability of the grid and it does not track whether private developers have ordered the necessary equipment.

So what does this all mean for Alberta’s AI data centre dream?

The Narwhal reached out to all of the big natural gas generators in the province to see if they were being impacted by turbine delays and cost increases, but received no responses. Emails to two data centre developers, Beacon Data Centers and Synapse, also did not get a response. 

It can be difficult to assess how the various companies could be impacted by the current race for power plant components, but applications to the Alberta Utilities Commission, the regulator for power plants, provide some insight. 

Synapse, which hopes to start construction on a data centre near the town of Olds in October, hasn’t disclosed who will build its turbines, but says once final decisions are in place, it could have them on site within a month. It plans to use modular generators, operating alone, before completing construction of a full system while the project is online.

In the company’s application to Alberta Environment and Parks, Synapse says it will use generators from Alberta-based Eco Power Equipment, which specializes in portable gas generators. Eco Power said it doesn’t manufacture turbines. 

Another data centre moving through the regulatory process is Beacon Data Centers’ Indus project, southwest of Calgary. 

Its application to the regulator shows details on turbine components and has a target of Dec. 31, 2028, for completion of the project, pending approval.

Alberta’s electricity market overhaul stalls investment as companies wait for more certainty

As those projects move through the regulatory process, large electricity generators remain cautious about building new projects to help keep the lights on.

There are also questions about how the data centre boom could impact prices. Premier Smith says the Greenlight project could help bring down transmission costs, which ultimately show up on electricity bills. Noel agrees that’s possible. 

But the flip side is increased demand for natural gas and the trickle down of massive cost increases for building power plants could potentially increase electricity or heating bills. 

“I think everyone’s kind of sitting and waiting to see how the [restructured electricity market] plays out,” Noel says. 

“In 2028 we’ll phase out the old market and bring in the new, and maybe then we’ll start to see investment, but that’s a pretty long time.”

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Summary

• The Alberta government has gone back and forth on coal mining in the eastern slopes of the Rocky Mountains, with major decisions followed by major reversals.
• There are three main coal mines currently active in Alberta, with at least three more projects in earlier stages of development. The majority of these produce coal used to make steel.
• Country musician Corb Lund says his petition for a referendum question about coal mining in the Rockies has enough signatures to move ahead, but the government says it can’t be included on the October ballot.

Ever since the Alberta government surprised everyone by suddenly changing the rules around coal mining in the Rocky Mountains six years ago, the province has been on a rollercoaster of regulatory changes. 

First there was the lifting of the old coal policy, followed by its reinstatement after public outrage — but not before some projects were approved. Then there was a suspension of those approvals, followed by a government review. Confused yet?

As it stands now, the government says a new coal policy to govern mining and exploration will be unveiled this year. But the last several years of back and forth have resulted in hundreds of millions of dollars (so far) in government payments to coal companies that were burned by the on-again/off-again regulatory seesawing. 

And that’s not all. There’s also recent controversy over a petition led by country musician Corb Lund to block coal exploration in the Rockies, which the government says it won’t allow on the October ballot despite Lund claiming to have enough signatures (more on that below). 

So what’s going on with coal mining in Alberta, exactly? Are there any projects operating or exploring? Will we ever have regulatory clarity from the government? 

Let’s dive in.

Quick recap of the Alberta coal mining regulatory merry-go-round, please?

As noted above, the United Conservative Party government under former premier Jason Kenney suddenly killed a long-standing coal policy in Alberta, dating back to 1976. It did so on the Friday before a long weekend in 2020, but it failed to fly under the radar. The change made it easier to mine on the eastern slopes of the Rockies — a key fresh water source for much of the country. 

The ensuing outcry forced the government to backtrack on the change in 2021, but that was far from the end of it.

A year later, the government ordered a pause on new exploration in some areas and a government committee hit the road to gather input from Albertans.

The government then instituted a moratorium on exploration and development on the eastern slopes in 2022.

That new moratorium was lifted in 2025, allowing suspended projects to move forward and new applications to be filed as the government works on a new coal policy. The policy will govern where and when a company can mine for coal on the eastern slopes; the government is currently only consulting about it with industry. 

The province also says mountaintop removal mining won’t be allowed under its new policy, but there are serious questions about what that means, and how much of a mountain can still be removed.

Along the convoluted way, companies caught up in these changes sued the province for upwards of $12 billion, although the final figure will likely be lower based on settlements to date. The province has finalized agreements with two companies for a total of $238 million, leaving three lawsuits outstanding.

Those lawsuits were a primary consideration for the government when it decided to lift the moratorium last year, according to Premier Danielle Smith.

Also worth noting is the government’s own coal policy committee, which issued a report in 2021 arguing regional and subregional land-use plans — broad rules that seek to balance multiple uses, essentially what should and should not be allowed in designated areas of the province — need to be completed before “any major coal project approvals are considered.” 

Still with us?

Are there currently coal mines in Alberta? What’s happening now?

It’s hard to keep track of it all, and to remember which mines are still moving ahead and which have decided to head for more stable (regulatory) ground. There are currently three active coal mines in Alberta, with a handful in earlier stages of development.

But it’s important to make clear that we’re mostly talking about metallurgical coal here, which is a higher-grade product used in steel production. It’s different from coal burned to create electricity.

Most of the thermal coal mines, used to provide power, have shuttered with the end of coal-fired power in the province. But not all. 

Let’s break it down by region. In the central Rockies — the area roughly west of Edmonton and adjacent to Jasper National Park — there are currently two operating thermal mines; one thermal mine expansion, Vista; and one metallurgical mine proposal, Mine 14, which was controversially approved by the Alberta Energy Regulator (appeals to come). 

A little farther south, near the town of Nordegg, another metallurgical mine is in the exploration phase. 

In the southern region, there is a metallurgical mine, also in the exploration phase. 

There’s one more mine, east of Edmonton, that sells small quantities of thermal coal directly to the public.

Which Alberta mines are the most hotly debated?

Two of the mines that have generated the most controversy are actually not currently operating.

Mine 14, in west-central Alberta, along the Rockies near Grande Cache, was scheduled to have a public hearing after the regulator gave its nod of approval to the project. That hearing was cancelled, however, after conversations between the company and the CEO of the Alberta Energy Regulator, Rob Morgan, raised questions over the independence of the energy regulator, preventing opponents from airing their concerns about the project.

A coalition of environmental organizations is appealing that cancellation in the courts.

Then, farther south, there’s the Grassy Mountain mine proposed north of the Crowsnest Pass, a traditional coal region that hasn’t seen an active mine for decades. Grassy Mountain has generated the most opposition from ranchers, environmentalists and some First Nations. It was also the subject of controversy due to conversations between Morgan, the regulator CEO, and the company behind the project, Northback. The regulator refused to disclose to The Tyee, which broke the story, what was discussed at that meeting.

Grassy Mountain was rejected in 2021 by the Alberta Energy Regulator and the federal government. The regulator said the project was not in the public interest, while the federal review said the economic benefits of the project did not outweigh the significant environmental risks. That rejection was upheld in multiple court cases, but the mine was included on a provincial government list of approved projects that were not impacted by its moratorium.

In 2024, Energy Minister Brian Jean wrote a letter to the Alberta Energy Regulator saying the project could be considered.  

“Once a project is considered an advanced project it remains as one regardless of the outcome of regulatory applications submitted before it was declared an advanced project,” Jean wrote in his letter to the regulator.

He went on to say he expected the regulator would review any applications for advanced projects. The regulator dutifully did so and the project is moving through the regulatory process.

What’s up with Corb Lund’s petition about Alberta coal mining?

There is local support for Grassy Mountain in Crowsnest Pass, which held a non-binding referendum that showed majority support for the project (even though it’s located in the neighbouring Municipal District of Ranchlands).

The Piikani First Nation, on whose traditional territory the mine would sit, says it supports exploratory drilling, but is reserving judgement on the mine itself.

But there has been significant opposition across Alberta, not only to Grassy Mountain, but to coal mining on the eastern slopes in general. 

A recent petition asking the government to either ban coal mining on the Rockies, or to ask Albertans whether they want a ban in a referendum, claims to have more than 200,000 signatures, more than enough to get the issue on the ballot in October. However, Premier Smith said it’s too late for the topic to be included amongst a long list of referendum questions being put to Albertans — all of which deal with increased provincial sovereignty or separation.

The creator of that petition, country musician Corb Lund, said the petition is being tossed aside based on a missed deadline that didn’t exist. 

“I personally met with the premier in her office on May 11. We were literally discussing the wording of my question as it should appear on the ballot, face-to-face. And at no point was any June 1 deadline mentioned,” Lund said in a statement emailed to media. 

He said the premier has the authority to put something on the ballot and that she has done so multiple times, with nine of her government’s own questions on topics ranging from more control over immigration to constitutional amendments, as well as a question on holding a separation referendum.

If the question isn’t put to Albertans in October, it will have to wait until 2027.

In addition to the petition, the government’s own survey of Albertans, conducted in 2021, showed overwhelming concern about coal development in the province. More than 85 per cent of respondents didn’t think coal development or exploration was adequately regulated, and more than 90 per cent thought it should be barred from certain areas, including the Rockies, foothills, areas near watersheds and more.

What’s next with coal mining in Alberta

The government has promised a revamped coal policy for the province this year, but there is no date and no details. It is currently consulting industry, and only industry, on the policy.The Alberta government did not respond to an email asking when the new policy will be unveiled.

In the meantime, it has approved Mine 14, the Vista thermal coal mine expansion and allowed for Grassy Mountain to conduct exploratory drilling. Valory, the company behind Mine 14, is also pushing for a new metallurgical coal mine along the Rockies called Blackstone.

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Summary

• The Oil Sands Alliance, formerly known as the Pathways Alliance, represents the largest companies operating in the Alberta oilsands.
• Since 2021, the alliance has promised a huge carbon capture project that will help reduce oilsands emissions by 68 megatonnes each year, three-quarters of the industrial region’s total.
• In the finalized memorandum of understanding between the Alberta and federal governments, that number has been quietly reduced to just 16 megatonnes annually, a reduction of 77 per cent from the initial promise.

Five years ago, the five largest oilsands producers promised their operations would be net-zero by 2050. The claims were huge: a massive carbon capture and storage project would help reduce emissions by 68 million tonnes of carbon each year.

Now, with a memorandum signed between Alberta and Ottawa to facilitate a new oilsands pipeline to the West Coast and promises of billions in tax credits to support the project, those promises have plummeted. 

In the agreement, finalized in May, it’s anticipated those same producers will reduce their emissions by 16 million tonnes annually by 2045, a significant decline from the original claim.

The pledge to achieve net-zero emissions in the oilsands was part of an intense pitch to governments over the past five years, alongside major lobbying to provide financial support for what could be the largest carbon capture project in the world.

It was put forward by the Pathways Alliance — now renamed the Oil Sands Alliance — made up of the largest companies operating in the Alberta oilsands: Suncor, Cenovus, Canadian Natural Resources, Imperial Oil and ConocoPhillips. 

The federal and provincial governments have now both unveiled tax credits for carbon capture, rolled back environmental regulations aimed at tackling emissions, pledged to fast-track projects and signed an agreement to aggressively push a new pipeline through British Columbia, even without a company willing to build it. 

Patrick McCurdy, a professor of communications at the University of Ottawa who has studied environmental claims by the alliance of oilsands companies, said the walkback fits into a larger pattern of greenwashing — a method in which companies mislead the public through those claims. 

He said the companies will “say whatever is politically convenient and what they can get away with” to build the social licence needed to keep producing oil. 

“They have that now with [Prime Minister Mark] Carney,” he said.

Academic paper found ‘numerous indicators of greenwashing’ in carbon capture project’s messaging

The coalition of companies, then called Pathways Alliance, explicitly called for reductions of 68 megatonnes of emissions per year and celebrated the goal in news releases, editorials and widespread advertising campaigns.The plan, with carbon capture and storage as its centrepiece, would be built in three phases, each phase eliminating between 21 and 25 megatonnes per year, according to those early pledges. There are no other detailed plans highlighted by the alliance to achieve its net-zero pledge. One megatonne is one million tonnes.

As late as December of last year, the Alberta government used the 68 megatonne figure in a presentation to U.S. lawmakers highlighting Alberta’s energy potential.

McCurdy has studied the claims of the Oil Sands Alliance since its inception and co-published a paper in 2023 focused on how it greenwashes information. 

The paper’s conclusion was unequivocal. 

“There are numerous indicators of greenwashing in Pathways Alliance’s public communication,” it reads. “Their messaging omits important information, uses misleading framing and comparisons, and fails to meet standards expected of a credible net-zero plan.”

It says the alliance’s environmental, social and governance claims should raise concern about the viability of its carbon capture and storage project.

Canada does have laws about greenwashing — though they were walked back by the Carney government last year. When those laws passed, Pathways wiped many environmental promises from its website. The anti-greenwashing provisions, part of the federal Competition Act, had been created in part to address the issue of companies advertising they were headed toward net-zero emissions while not presenting evidence showing they were taking any significant steps toward cutting their carbon pollution.

In an interview, McCurdy said it’s typical for oil and gas companies to make big public promises and then lobby behind the scenes to move the yardsticks. 

“I imagine they’re able to reduce these numbers, or change the numbers … because the social licence doesn’t seem to be threatened in the same way it was before,” he said.

The Oil Sands Alliance did not respond to questions from The Narwhal.

The office of Alberta Premier Danielle Smith and the Alberta Environment and Protected Areas Minister Grant Hunter did not respond to emailed questions. 

The federal Privy Council Office did reply, but did not directly answer any of the emailed questions, instead highlighting the balance between economic growth and emissions reductions.

When asked if the federal government is confident the project can achieve the lowered target of 16 megatonnes, Pierre Cuguen, a spokesperson for the Privy Council Office, said the country already has operating carbon capture and storage projects that prove the technology can work in real-world conditions, while noting it aims to be the largest carbon capture project in the world. 

“Pathways will continue to go through detailed design work, regulatory review and investment decisions as the project moves forward,” he wrote.

The oilsands account for a third of all emissions in Alberta

The memorandum of understanding between Ottawa and Alberta finalized terms for everything from an industrial carbon price to building out a national electricity grid, but the terms related to the Pathways carbon capture project still require a three-way agreement with the companies behind the scheme. 

But the governments reaffirmed “their shared objective” of the project reducing emissions by 16 megatonnes annually by 2045, starting with six megatonnes when the project comes online in 2035. 

The oilsands emit approximately 90 megatonnes of emissions each year, almost 33 per cent of all emissions in Alberta. Since 2004, 15 megatonnes of emissions have been captured by existing carbon capture projects in the province, slightly more than one megatonne per year.

Both governments have agreed to walk back carbon price targets, streamline approvals of projects and the federal government has scrapped the proposed oil and gas emissions cap and largely handed environmental impact assessments over to the province. Each represents a lobbying victory for the oil and gas companies.

Sean McCoy, an associate professor of engineering at the University of Calgary who specializes in carbon capture, said the changes in emissions pledges are not due to any changes in technology or knowledge. 

“Let me put it this way, I bet 99 per cent of what we know today about capturing carbon dioxide, more like 99 or even above, we knew in 2021,” he said. 

McCoy said one possible answer to why the project has been scaled back so drastically is cost, comparing it to a home renovation where big plans are reconsidered as the price tag rises. 

“That is pretty common in these sorts of projects, either the cost goes up or the scope of the project shrinks if you’re trying to manage your budget,” he said.

But McCoy points out that even the reduced 16 megatonne figure represents the largest carbon capture and utilization project ever constructed.

When asked if the reduced target was achievable, McCoy said it’s ambitious.

“It’s just really, really big,” he said. “You’ve got to look at the scale of all the different parts, because it’s not like they’re going to capture 16 million tonnes at one smoke stack.”

It’s unclear how much the final project will cost, but estimates point to a budget over $20 billion, and the former CEO of Imperial Oil previously said the alliance was aiming for 75 per cent of the funds to come from the federal and provincial governments. Most of that will come from newly established tax credits.

Carbon capture is ‘always a just-around-the-corner type thing’: professor

There’s a lot we don’t know about the Pathways project, McCoy said, so it’s hard to directly evaluate the plans. 

McCurdy, looking at it through the lens of influence and communication, sees that as intentional. His research includes strategic omissions as part of the greenwashing strategy. 

“These companies, some of the biggest in the country, have the money to focus-group, to get the best creatives to make these campaigns to try and get public sentiment on their side,” he said.

But while earlier oilsands marketing focused on the need to decarbonize and the goal of achieving net-zero emissions, the messaging has changed alongside the reduced emissions ambitions. 

Jon McKenzie, the CEO of Cenovus, told investors in May the debate around oilsands development has been “myopically focused on the climate agenda,” according to the Canadian Press.

It’s a more direct pushback against the earlier claims of the alliance, but for McCurdy, the intent was always to kick the can down the road. 

“It’s always a just-around-the-corner type thing,” he said of carbon capture technology and some of its bigger claims. “It’s a well-known trope to try and look at technology to save us out of this.”

Updated June 5, 2026, at 3:30 p.m. MT: A previous version of this article incorrectly referred to the Oil Sands Alliance as the Oilsands Alliance.

Updated on June 25, 2026, at 3:30 p.m. MT: This story has been updated to correct an error. Past claims of the the Oil Sands Alliance, formerly known as the Pathway Alliance, promised 68 megatonnes of total emissions reduction, not of carbon capture specifically, as a previous version of this article and its headline stated. Carbon capture and storage has always been the centrepiece of the alliance’s plan, and no other detailed plans were highlighted by the alliance as ways to achieve its net-zero pledge.

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Summary

• The federal government will offer tax credits to companies that capture carbon pollution and use it to extract more oil.
• That process is called enhanced oil recovery, and it involves injecting carbon dioxide deep underground to push more oil to the surface.
• Critics say subsidizing enhanced oil recovery operations is counterproductive. It does stop some carbon dioxide from escaping into the atmosphere, but it also enables the production of more carbon-emitting fossil fuels.

Canada is planning to give financial incentives to companies that capture carbon dioxide and use it to produce more oil. The technique, called enhanced oil recovery, was formerly barred from receiving federal tax credits. 

Huh? Enhanced oil recovery? You’d be excused for scratching your head.

The technique uses carbon dioxide to pump more oil (we’ll get into it below) — and is controversial. Can you reduce emissions by pumping more oil? 

But the government’s ban on subsidies for enhanced oil recovery projects was reversed in dramatic fashion last year, first in a deal with Alberta that resulted in cabinet minister Steven Guilbeault resigning.

The government then solidified the change across the country in its latest economic update.

So what is enhanced oil recovery and what are its impacts on emissions and on government finances?

Here’s a primer.

Back up, what’s carbon capture, utilization and storage?

Industries emit a lot of carbon dioxide. Too much. Governments have tried to incentivize companies to reduce the amount of carbon pollution they release into the atmosphere — where it traps heat and contributes to climate-driven problems like increased wildfire, hurricanes, droughts and more.

One strategy is to capture the carbon pollution rather than release it up into the sky, then either store it (storage) or use it to make other things (utilization). When it’s stored, it’s most often injected deep underground.

There are two options in this scenario: one, it can be stored underground, plain and simple. Buried and forgotten.

The second is that you use the carbon dioxide to get more oil out of the ground, then store it. That’s what’s known as enhanced oil recovery — in essence, injecting carbon dioxide into a well so you can get more oil. Globally, it’s by far the most common of the two.

A 2022 report found nearly three-quarters of captured carbon pollution around the world is used to extract more oil.

How does enhanced oil recovery work?

Enhanced oil recovery can involve pumping anything from water to steam to gas deep into the ground to increase pressure in an underground oil reservoir. The goal? To force more oil out of a well. 

But in this instance, we’re talking specifically about using captured carbon dioxide as the pressure builder, often alongside water.

A company will either capture carbon pollution, or purchase it from another source, and then inject it deep underground to push more oil to the surface. Most of that carbon pollution will then remain trapped underground.

A well-designed system will capture emissions from the enhanced oil recovery operation and reinject them back into the reservoir, creating a closed loop, but not all systems will capture all emissions.

Sounds smart, what’s up?

The process can significantly prolong the lifespan of a fossil fuel reservoir, so it makes sense if the goal is to increase or extend production. 

It also creates a bigger market for captured emissions, further incentivizing companies to capture carbon pollution rather than release it into the atmosphere. 

But the issue is that enhanced oil recovery takes carbon dioxide, ostensibly captured to reduce emissions, and uses it to pull more carbon-emitting fossil fuels from the ground.

Determining whether there is a net reduction in emissions from this process is complicated and depends on a lot of factors — including how much traditional production is displaced by enhanced oil recovery, how much carbon is actually stored underground, the impact on prices and demand, how much carbon is produced while recovering oil, the type of oil produced and the lifecycle of the fuel that is produced.

Sound complicated? It is.

Research suggests the process can achieve reductions in per-barrel emissions, commonly referred to as emissions intensity.

On the other hand, enhanced oil recovery produces more carbon pollution than simply capturing and storing emissions permanently underground.

Traditionally, enhanced oil recovery used carbon dioxide that was naturally occurring and already stored underground, but newer methods involve using captured emissions — a critical distinction when discussing the potential of any emissions reductions. 

As one 2025 peer-reviewed meta-analysis of enhanced oil recovery research dryly suggested, “the extent to which [carbon capture and utilization] projects that store captured [carbon dioxide] in oil reservoirs support achieving [greenhouse gas] emissions targets is debated.” 

That study found analyses of the life-cycle emissions of enhanced oil recovery vary greatly — all the way from increasing emissions to reducing them.

So, why are we talking about this?

The previous Liberal government announced tax credits for carbon capture and utilization projects, significantly reducing costs for the companies building them. Projects are typically expensive to build and the government wanted any and all emissions reductions to move ahead. 

It excluded enhanced oil recovery, arguing it was counterproductive to reducing overall emissions and the government’s goal to move toward a net-zero economy.

The Liberals under Prime Minister Mark Carney, however, reversed that decision and announced enhanced oil recovery could receive tax credits, first in a November memorandum of understanding with Alberta regarding a new pipeline, and then again in its latest economic update. Industry cheered the decision, while those concerned with emissions cried foul.

Under Carney’s new rules, a project will have to permanently store 95 per cent of the carbon dioxide used to pump more oil be eligible for tax credits. 

In Alberta, the government already provides tax credits for enhanced oil recovery operations. That program does not include the need to capture a minimum amount of carbon in order to qualify.

Critics call these credits a fossil fuel subsidy. Companies who receive the money from the federal and provincial governments do not. Therein lies the debate.

What will this cost taxpayers?

That will depend on how many producers meet the criteria set by the government.

In 2024, the Parliamentary Budget Office estimated the tax credit would cost the government $5.7 billion between 2022 and 2028 — but that was before enhanced oil recovery was added to the list of eligible projects. It’s unclear what the impact of that addition will be. 

There is one important distinction: the tax credits for enhanced oil recovery aren’t as lucrative as those for storage alone: the amount of money an oil project can recoup is half of what a company that simply stores carbon permanently underground can receive. 

For that reason, the federal government estimates credits for enhanced oil recovery might actually save some taxpayer dollars — $395 million over four years, starting in 2027, according to a federal Department of Finance official responding to questions from The Narwhal.

The official said the savings would come from companies deciding to store carbon for enhanced oil recovery rather than dedicated storage, and receive less public money for doing so.

While incentivizing enhanced oil recovery may represent a savings in terms of tax credits, the costs come from increased emissions and long-term impacts.

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