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By rdnewsNOW staff with files from The Canadian Press

Lines Are Drawn

Alberta reacts to federal emissions cap on oil and gas sector

Dec 7, 2023 | 12:17 PM

Canada’s oil and gas industry says the emissions cap framework announced by Ottawa could result in significant production curtailments by companies.

The Canadian Association of Petroleum Producers (CAPP) says the federal government’s plan to have the oil and gas sector cut its emissions by more than a third below 2019 levels by 2030 is problematic.

It says the industry is working to reduce its emissions, but Ottawa’s targeted time frame is too ambitious.

It says many of the technologies oil and gas producers hope to use to decarbonize their operations are still in the early stages of development.

The federal government says its emission cap will take the form of a cap-and-trade system, meaning companies would be able to buy offset credits or contribute to a decarbonization fund that would lower their emissions-cutting requirement to just 20 to 23 per cent.

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CAPP says Ottawa’s plan risks triggering “unforeseen socioeconomic consequences,” including higher energy prices for Canadians.

Meantime, Alberta Premier Danielle Smith and Environment and Protected Areas Minister Rebecca Schulz issued the following statement in response to the federal government’s oil and gas sector greenhouse gas emissions cap, announced Dec. 7:

“This announced de facto production cap on Alberta’s oil and gas sector amounts to an intentional attack by the federal government on the economy of Alberta and the financial well-being of millions of Albertans and Canadians.

“Alberta owns our resources, and under the Constitution we have the exclusive jurisdiction to develop and manage them. We have done so responsibly by setting a price on carbon as far back as 2007, developing a carbon offset and trading program (TIER), investing billions in commercial scale carbon capture, creating an innovation fund that has so far supported 260 emissions-reducing projects with $2.6 billion in grants, and by establishing a clear framework for reaching carbon neutrality across our entire economy by 2050.

“With their pronouncement singling out the oil and gas sector alone for punitive federal treatment, Prime Minister Justin Trudeau and his eco-extremist Minister of the Environment and Climate Change Steven Guilbeault are risking hundreds of billions of dollars of investments in Alberta’s and Canada’s economies and core social programs, are devaluing the retirement investments of millions of Canadians, and are threatening the jobs of hundreds of thousands of Albertans.

“Ironically, they are also significantly undercutting global emissions-reduction efforts by effectively deincentivizing capital investment by the oil and gas sector in the emissions-reducing technologies and fuels the world needs Alberta to develop and share.

“This proposed cap also undermines the unity of our country. Albertans will not tolerate it. Our province is simply done with what amounts to a steady stream of economic sanctions and punitive measures thrown upon our citizens and businesses to intentionally damage their livelihoods and the economic engine that disproportionally powers our national economy and the programs that Canadians rely on.

“Over the coming months, our cabinet and caucus will develop a constitutional shield in response to this and other recent attacks on our province by what is fast becoming one of the most damaging federal administrations in Canadian history.

“Alberta will continue implementing our Emissions Reduction and Energy Development Plan to achieve a carbon-neutral economy by 2050 through a combination of investments in emission-reducing technologies combined with practical emission offsets, all while continuing the development of Alberta’s world-class natural energy resources for Canada and the world.

“The federal government must stay out of our province’s constitutional jurisdiction and instead work with us to align their emissions-reduction efforts with our effective made-in-Alberta plan.”

Meantime, Kathleen Ganley, Alberta NDP Energy & Climate Critic for Oil and Gas, Hydrogen and Minerals, issued the following statement in response to today’s federal emissions cap release:

“We must strengthen and protect our economy and we must combat climate change. We absolutely can do both at the same time, but the petty dispute between the federal and provincial governments means we are failing at both.

“Under the NDP, Alberta had a climate plan that was successful in reducing methane and other emissions and allowed industry to innovate and find solutions. This announcement today is the clearest evidence yet of the negative impact of not having a made-in-Alberta plan — instead, we have a UCP government focused solely on picking fights rather than developing a plan to combat climate change and support working people.

“We’re concerned the measures announced today could amount to a production cap but we will consult further with industry and environmental organizations. Let’s be clear, rules that amount to a cap on production rather than a cap on emissions, are not rules that are good for the cost-of-living or economic stability.

“Still, we know that having a realistic cap is important and industry has set their own reductions targets. All of this work is vital for potential job creation and investment opportunities moving forward.

“When both levels of government fail to work together on the future of Alberta industry, it’s ultimately workers and their families that suffer. Alberta needs to focus on advancing stable policies to attract investments, create jobs, and reduce emissions.”

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