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UPDATE 1-Cenovus Energy CEO says Alberta, Ottawa must 'turn down temp,' talk more

(Adds details, quote from Pathways executive)

By Nia Williams and Steve Scherer

Ottawa, Jan 23 (Reuters) - The chief executive of Cenovus Energy, which is part of an alliance of Canada's biggest oil sands producers, on Monday said friction between the federal and Alberta governments was making it difficult to hold meaningful discussions on funding carbon capture and storage (CCS) technology needed to decarbonize the oil and gas sector.

The Pathways Alliance, a collaboration between Canada's six largest oil sands producers targeting net-zero emissions by 2050, is planning to develop a CCS hub in northern Alberta, expected to cost C$16.5 billion ($12.3 billion) by 2030.

The group wants public money to fund 66%, or roughly C$10.9 billion, of that and says government support would speed up decarbonisation and help establish a competitive clean-tech industry in Canada.

So far the federal government has unveiled an investment tax credit worth C$2.6 billion over the next five years, but both Ottawa and Alberta say the other should contribute more.

Alberta's conservative Premier Danielle Smith is a vocal critic of Liberal Prime Minister Justin Trudeau and has slammed many aspects of federal climate policy, accusing Ottawa of trying to cripple the western province's energy sector.

Trudeau told Reuters in an interview earlier this month the sooner Alberta's "political class" understood the future is not to be feared, the better.

"It's very hard to have meaningful discussions with another party when you're lobbing rocks at each other," Alex Pourbaix, chief executive of Pathways member Cenovus, told Reuters in an interview.

"I would like to see the temperature turned down a little bit."

Pourbaix said there still needs to be a "significant discussion" between the federal and provincial governments and industry, and Pathways has set a target for that to happen early this year.

"I've had both levels of government telling me that they're supportive of doing that and engaging on that. I think it has not occurred yet to the level it needs to resolve the differences that the groups may have," he added.

Canada is the world's fourth-largest producer of crude, most of which comes from Alberta's oil sands. The oil and gas sector is the country's highest-polluting industry and needs to drastically cut emissions if Canada is to achieve its international climate commitments.

The Pathways Alliance has already said Ottawa's goal of cutting oil and gas emissions 42% by 2030, equivalent to a 35-megatonne reduction, is impossible.

The group could achieve a 22-megatonne reduction in carbon emissions by 2030, said Pathways President Kendall Dilling, but that depends on key components like public funding being agreed and a smooth regulatory approval process for the CCS project.

"We don't have time to slip," Dilling said. "Canada's track record on major infrastructure development in the last decade has been abysmal," Dilling said. " If we run into those same kind of troubles, then 2030 will not be realized." ($1 = 1.3383 Canadian dollars) (Reporting by Nia Williams in British Columbia and Steve Scherer in Ottawa; Editing by Marguerita Choy and Jonathan Oatis)