(Adds comment from energy regulator)
By Ethan Lou
CALGARY, Alberta, Dec 19 (Reuters) - U.S.-based Koch Industries Inc's KCHIN.UL oil sands subsidiary in Canada wants to pull out of a project in Alberta, citing uncertainty around the economy and new environmental regulations, the energy regulator for the province said on Monday.
A Koch Oil Sands Operating ULC executive asked last week for the regulatory approvals on the C$800 million ($597.19 million) Muskwa Steam Assisted Gravity Drainage Oil Sands project to be rescinded by the end of the year, according to a letter provided to Reuters by the Alberta Energy Regulator (AER). The regulator said it is reviewing that request.
This month Canada's year-old Liberal government, which ran on a pro-environment platform, reached a deal with provinces including Alberta to introduce a landmark national carbon price.
Critics of the policy said it would make Canada less attractive to investment, especially because U.S. energy prices may come down next year when climate change skeptic Donald Trump becomes president.
Alberta is home to Canada's vast oil sands and is the No. 1 exporter of crude to the United States. The province has been seeking ways to diversify its economy to ease the pain of the two-year slump in global oil prices.
Alberta's left-leaning government has been broadly aligned with the federal Liberals and has said it would back the national carbon price if Prime Minister Justin Trudeau approves pipeline projects needed to export the province's oil.
Last year, the province announced its own plan to cut emissions. A new carbon tax is scheduled to take effect in 2017.
Byron Lutes, vice president of business development for Koch Oil Sands, said in his letter to the AER the company will "monitor the economic and regulatory climate over the next several years for any improvements that may justify a re-submittal" for Muskwa regulatory approvals.
Koch Oil Sands referred questions to Koch Industries, which did not immediately respond.
Alberta Energy Minister Margaret McCuaig-Boyd said her department is still seeing "a variety of" companies moving forward with oil sands projects, including Canadian Natural Resources Ltd CNQ.TO , which announced the restart of its C$1 billion dollar Kirby North project last month. climate leadership plan improves the province's reputation as a responsible energy producer, which directly led to the recent approval of two pipelines by the federal government," McCuaig-Boyd said in a statement. ($1 = 1.3396 Canadian dollars) (Editing by Grant McCool and Matthew Lewis)