A standoff over carbon pricing and methane regulations is freezing major investment in Canada’s oil sands, as Canadian Natural Resources Ltd. (NYSE: CNQ) suspended its $8.25-billion Jackpine mine expansion Thursday, pointing directly at Ottawa and Edmonton’s failure to finalize industrial emissions policy.
Company president Scott Stauth told investors the project was on hold “due to lack of finalization of government regulatory policies around carbon pricing and methane, which creates uncertainty and economic burden for our long-term growth.”
Until those rules are set, he said, CNRL cannot determine whether Jackpine is economically viable.
The two governments pledged in a memorandum of understanding signed late last year to reach formal agreements on industrial carbon pricing and methane by April 1 — a deadline now looming over the entire sector.
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Stauth said CNRL will evaluate whatever framework emerges before committing the roughly $150 million in early engineering work the project requires. The suspension trims $310 million from the company’s 2026 capital and operating budget.
Jackpine, a proposed mine in Alberta’s Fort McMurray region, would have added 150,000 barrels per day of bitumen capacity and included a new extraction and treatment processing plant.
Janetta McKenzie, director of the Pembina Institute’s oil and gas program, called it “odd to publicly pause a major investment due to carbon pricing and methane policy uncertainty, when clarity on those very topics is expected in less than a month.”
She noted that oilsands producers already hold a seat at the trilateral negotiating table with both governments, and called on Ottawa and Alberta to deliver a deal that ramps the minimum effective carbon credit price to $130 per tonne by April 1.
CNRL recorded a fourth-quarter net profit of $5.3 billion — nearly five times the $1.14 billion it earned a year earlier — and raised its quarterly dividend to 62.5 cents per share.
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