The Alberta government says it will give “financial supports” to oilsands companies to encourage them to raise their production and fill a proposed pipeline that would carry a million barrels of oil per day to the Pacific Coast.

The revelation is part of a new set of disclosures released by the federal government on its deal with Alberta and oilsands companies to satisfy Ottawa’s climate goals while building the massive new export pipeline for oil.

A backgrounder on the deal lays out broad terms on which five oilsands companies — Canada Natural Resources Ltd. , Suncor Energy Inc. , Cenovus Energy Inc. , Imperial Oil Ltd. and ConocoPhillips Co. — agree to build a carbon capture and storage mega-project.

The Pathways project, originally expected to cost $16 billion, has long been a key condition for Prime Minister Mark Carney in order to get his blessing for the proposed oil pipeline.

The backgrounder document offers a window into some of the concessions each party has made in order to expand production and ship the oil to energy-hungry markets in Asia.

“It was kind of, in some ways, the missing piece in everything we’ve heard over the past few weeks,” said Charles St-Arnaud, the chief economist at Servus Credit Union.

Alberta and Canada are offering the country’s five largest oilsands producers lower carbon costs, faster permits and financial incentives, but the backgrounder offers no details on what kind of support — or the financial value — the province is offering industry in exchange for more production.

The payoff, the governments say, is more oil, more royalties and thousands of jobs. The catch: it all rides on a pipeline that, so far, has no final approvals or committed customers.

St-Arnaud said the entire endeavor of growing production and building the pipeline would require billions of dollars in up-front costs.

“I’m not sure that the industry, especially the shareholders, have the appetite to commit that type of capital,” St-Arnaud said.

Instead, the provincial and federal governments would be majority owners of the pipeline, which would cost $35 billion to $44 billion and would run from Alberta to a terminal on British Columbia’s southern coast. Calgary’s Pembina Pipeline Corp. would control a 10 per cent stake, with an option to double it, while a working interest would be available to Indigenous communities.

“There was a need for some financial de-risking from governments, and we saw it,” St-Arnaud said.

For their part, oilsands companies promised to build on time, grow production and buy Canadian, down to the steel and aluminum. The backgrounder document says the producers have also agreed to cut their emissions by six million tonnes per year by early 2035 through the Pathways project, with plans for further reductions of 10 million tonnes per year a decade later.

Ana Avramovic, who specializes in carbon markets at ClearSky Ltd., said it was a “big day for Canadian climate policy.”

“Canada and Alberta have a strong history of highly credible carbon markets, where credits have represented real reductions,” Avramovic, head of sales and trading at the environmental markets platform, said in a note to the Financial Post.

“That track record is why the world takes us seriously, and as long as it continues, this country will keep showing real leadership in this space, at home and globally.”

Among other measures, Ottawa has agreed to provide oilsands companies with financing to support operating costs for carbon capture projects.

And Alberta said it would offer incentives to encourage more production.

Energy investors have for years demanded that oil and gas companies stop building large, risky production projects and instead focus on paying down debt and returning excess funds to shareholders.

But these marching orders from investors run counter to the Alberta government’s goals of doubling oil and gas production by 2035. A new pipeline to the British Columbia coast is part of those ambitions to build future revenue streams to help pay for government services.

Premier Danielle Smith has publicly mused that she’s open to the idea of offering oilsands companies some incentives to invest in greenfield development. She has since put the commitment in writing.

“Alberta has agreed to implement financial supports to enable the oil production growth needed to underpin new export capacity,” according to the backgrounder released Monday.

One of the upsides governments are selling is jobs. Earlier this month, Carney said the pipeline and Pathways together would create 175,000 across Alberta, B.C. and the rest of the country. The rest of the payoff is the royalties, taxes and other spinoffs that flow from more oil.

The incentives are on the table. What is not, yet, is a binding contract, an approved pipeline or oil producers willing to say yes.

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