Ottawa bills its planned emissions cap on oil and gas as “limiting pollution, driving innovation, and creating jobs.”
That’s not at all what critics see. They forecast instead “lower production, lower exports, fewer jobs, lower GDP, and less revenues to governments to fund critical infrastructure and social programs on which Canadians rely.”
That was from Lisa Baiton, CEO of the Canadian Association of Petroleum Producers (CAPP), who also said: “The draft emissions cap regulations, if implemented, are likely to deter investment into Canadian oil and natural gas projects.”
Alberta Premier Danielle Smith’s language was less diplomatic: “I’m pissed.”
She went on to say the feds’ plan is a “deranged vendetta” against the oil-and-gas producing province by federal Environment Minister Steven Guilbeault.
“This production cap will hurt families, hurt businesses and hurt Canada’s economy. . . . It cannot destroy the most important industry in the country by targeting our province with this kind of unilateral action. We just won’t stand for it.”
So stand by for a court challenge by her government. “We will defend our province, our country and our constitutional rights. Make no mistake, this cap violates Canada’s Constitution.”
The oil-and-gas sector hammered the federal plan, and the Business Council of Canada said the emissions cap “will make Canadians poorer and harm energy ties with the U.S.”
Shannon Joseph, CEO of Energy for a Secure Future Canada, protested: “Canada continues to pursue its climate policy in a vacuum, ignoring the big picture of global emissions.
“This places at risk our international interests, tens of thousands of good paying jobs and important progress on reconciliation. Canada’s international allies are seeking our energy resources to enable them to displace higher emitting fuels and to support their security. This policy will act as a barrier to this and to the investment attraction required for ongoing environmental innovation.”
Her comment on the ‘”big picture” reminded us of this: If we shut Canada down totally — no jobs, no businesses, and no economy — we would reduce world emissions by 1.5-1.6%. Growing use and development of oil and gas in other countries would replace those emissions in a year or less.
The federal emissions cap as drafted would require greenhouse gas emissions by oil/gas operators to drop by the equivalent of 35 per cent (below 2019 levels) by 2030-32. (For details on the rules and red tape, see https://ow.ly/W8Cz50U3nsi)
Guilbeault said his emission limits are technically achievable and need not reduce production. But Premier Smith claimed the emissions cap would require her province to cut oil production by one million barrels a day by 2030, leading “Alberta and our country into economic and societal decline.”
Smith’s energy minister, Brian Jean: “The 35% cut in emissions by 2030 is not realistic, the only way to do so is to cut production. This will result in over a million barrels cut per day by 2030 and 2.1-million by 2035, killing over 150,000 jobs and tens of billions of dollars a year. We must Scrap the Cap!”
And another premier, Scott Moe of Saskatchewan, said: “These new federal policies will have serious economic impacts on Canadians and limit our . . . Canadian energy products from providing heat and electricity to the world.”
Among industry critics was Cenovus CEO Alex Pourbaix: “Believe it or not, I agree with federal Environment Minister Steven Guilbeault. Announcing his updated emissions cap regulations this week, he bragged that ‘no other major oil and gas producer is doing what we’re doing.’ He is right.
“But it’s not because countries like Norway and the United States aren’t as ‘visionary’ as our federal government believes itself to be.
“No, other oil- and gas-producing countries aren’t implementing an emissions cap because they understand the incredible importance of the oil and gas sector to their economies and they’re too smart to shoot themselves in the foot.”
Pourbaix added in a guest column in The Edmonton Journal: “While this legislation is billed as an emissions cap, let’s be clear about its true intentions. This is another addition to an already packed policy agenda of new rules – the clean fuel standard, clean electricity regulations and methane regulations. It will have the spin‐off effect of shutting in production in the world’s fourth‐largest oil- and gas-producing nation.”
Kendall Dilling, president of the Pathways Alliance, which represents some of the country’s largest oilsands producers: “The emissions cap is a misguided proposal that will drive cuts in oil and gas production and have a significant, negative impact on Canada’s economy.”
Pathways added: “The proposed emissions cap will likely have the unintended effect of making oil and gas operators involuntarily choose to shut in Canadian production rather than decarbonize it for global and domestic markets.”
Pipeline giant Enbridge: “The emissions cap, as proposed, adds complexity and uncertainty to an already complicated regulatory regime — negatively impacting the competitiveness of Canada’s energy.”
Canada Action collected and offered “23 Quotes on Why Canada’s Oil & Gas Emissions Cap Doesn’t Make Sense.” The 23 quotes include one from Alliance CEO Karen Ogen.
And one more quote from CAPP: “An emissions cap that leads to production cuts won’t reduce world oil and gas demand—but it will reduce Canadian prosperity.”
As for natural-gas production (and thus our LNG exports), CEO François Poirier of TC Energy had this to say: “Canadian natural gas is amongst the world’s most affordable, sustainable, and secure. An emissions cap, which will act as a cap on domestic production of natural gas, will harm Canadian families and businesses by raising prices on energy.
‘It will also set back the global efforts toward climate change by slowing down the coal-to-gas switch underway that has been responsible for 55% of Canada’s total emissions reductions.”
Alberta’s Canadian Energy Centre urged citizens to send a Scrap the Cap message to MPs: “Don’t put a cap on Canadian prosperity.”
Meanwhile, the Conference Board of Canada gas has estimated a cap would reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, kill up to 151,300 jobs across Canada by 2030, and slow down national economic growth from 2023 to 2030 from 15.3 per cent to 14.3 per cent.
And Deloitte Canada says Canadian oil and gas companies will decide to cut their production rather than invest in carbon capture and storage technology that is “economically unviable.”
All this as U.S. president-elect Donald Trump chants “drill, baby, drill” and promises on his first day back in office to ditch the Biden administration’s moratorium on approvals for new LNG-for-export plants.
Premier Smith flanked by Alberta Energy Minister Brian Jean and Environment Minister Rebecca Schulz
(Posted here 13 November 2024)
