Oil and gas industry | Ottawa wants to reduce emissions by a third

(Ottawa and Dubai) Alberta promises to deploy a “constitutional shield” to avoid complying with the cap on greenhouse gas emissions that Ottawa intends to impose on the oil and gas sector. Ministers Steven Guilbeault and Jonathan Wilkinson announced Thursday that this cap will reduce them by a third, without limiting production as requested by certain environmental groups.

Premier Danielle Smith still sees it as “an intentional attack by the federal government on Alberta’s economy” which “undermines national unity.” She maintains that “hundreds of thousands of jobs” are at stake and calls for the departure of Minister Steven Guilbeault.

The Canadian Association of Petroleum Producers believes that this policy “risks triggering unforeseen socio-economic consequences, not the least of which is an increase in energy prices.” Its president and CEO, Lisa Baiton, recalled that her industry provided $9 billion to the federal treasury in 2022.

“It is clear that the real objective of Justin Trudeau and his radical Minister of the Environment is to phase out the entire Canadian energy sector,” denounced the Conservatives in a press release.

This cap, which has been expected since 2021, should not be seen as a measure targeting Alberta, warned the Minister of Environment and Climate Change, Steven Guilbeault, in an interview with The Presson the sidelines of COP28 in Dubai.

“We have targets [pour de réduction des émissions] in transport, we have targets for electricity, then we have targets for oil and gas,” he said shortly before participating remotely in the press conference to announce the ceiling with his colleague in Natural Resources, Jonathan Wilkinson, and his colleague at Employment and Workforce Development, Randy Boissonnault, the only Albertan to sit in Cabinet.

“I cannot, in good conscience, let a sector pollute without limits, while we are asking everyone to make an effort, there is an issue of equity in that,” he added , recalling that the oil and gas sector is the one that emits the most greenhouse gases in the country, with 28% of the total. The government’s objective is to achieve carbon neutrality by 2050.

The regulatory framework presented by officials from the Ministry of Environment and Climate Change will cap emissions in 2030 at 35 to 38 percent below 2019 levels for producers of liquefied natural gas, conventional oil, offshore tar sands or natural gas. It provides for relaxations to allow companies to comply which would allow emission levels of 20% to 23% below 2019 levels. The limit will be introduced gradually between 2026 and 2030. The government estimates that it This is a realistic target for the oil and gas industry and compatible with a 12% increase in production compared to 2019.

To achieve this, Ottawa will implement a cap-and-trade system. They will therefore be able to purchase carbon offset credits or contribute to a decarbonization fund. In particular, they will be able to use carbon capture and storage, a criticized technology. Consultations will continue until February 5, 2024 and the government intends to publish its draft regulation made under the Canadian Environmental Protection Act towards mid-2024, which will delay its implementation. The cap will only affect upstream production and not the emissions that will be generated by the use of these fossil fuels.

“I will tell you what we are trying to do with the most innovative sector in the country, the oil and gas sector, is to produce the greenest barrel of oil on the planet because that is what the world will want first and more,” said Minister Boissonnault, emphasizing that there was more appetite for Canadian oil since the Russian invasion of Ukraine.

The measure is intended to complement the target for reducing leaks and methane releases from the oil and gas industry announced on December 4 by Ottawa, Minister Guilbeault said in an interview. Because the specific methane target, the clean fuel standard and carbon pricing alone will not sufficiently reduce GHG emissions from the oil and gas sector, he explained.

“The cap adds another layer to ensure that emissions from the sector decrease, regardless of what happens with production,” said the minister. He welcomed the fact that Canada is the only country in the world to impose an emissions cap on its oil and gas sector.

“There is not an oil-producing country that I speak to here that does that; the United States, Norway, Saudi Arabia, the United Arab Emirates, no one,” he told The Press.

“This is not the ambitious emissions cap we need to put us on a path to phase out fossil fuels, completely, quickly and equitably, so as to avoid the worst impacts of climate change,” he said. responded Greenpeace Canada spokesperson Patrick Bonin. He deplores “the merciless pressure exerted by oil and gas lobbyists and provincial premiers” to obtain loopholes.

Climate Action Network Canada, which brings together 150 environmental and civil society organizations, is calling on the government to present a more ambitious ceiling. He recalls that the International Energy Agency recommends a reduction of 60% by 2030 to avoid global warming beyond 1.5 degrees Celsius.

“Every additional day that emissions from the oil and gas industry go unregulated means devastating health impacts, more climate disasters, and an increased cost of living for families and communities,” recalled its general director, Caroline Brouillette.

The president of the Climate Institute of Canada, Rick Smith, who is participating in COP28, believes that the announced cap is a “reasonable and necessary” measure, but that Ottawa should not wait until 2026 to implement it. .

“The persistent increase in emissions [du secteur du pétrole et de gaz] reverses progress made in other sectors of the economy in combating climate change,” he added.

Capping GHG emissions from the oil and gas sector is even “compatible with the increase in oil production”, calculates the Climate Institute of Canada, which also sees it as a way to stimulate innovation and thus make the sector more sustainable. Canada’s energy more competitive in global markets.