The six largest producers operating in Canada’s oil sands have dubbed themselves the Pathways Alliance and are airing commercials touting their enthusiasm for and “plans” to reduce greenhouse gas emissions.
The plan is just a proposal at this point and could depend on billions of dollars in public funding. But one way of looking at the federal government’s proposed oil and gas emissions cap is that it simply means that Pathways Alliance, and every other oil company that even in theory agrees with the need to reduce emissions. It is possible that a call will be made to executives, industry groups and political leaders. To start moving.
Viewed through a broader lens, this cap is part of an inevitable calculation that takes into account both the facts of the oil and gas industry’s emissions and the scale of Canada’s ambitions to reduce emissions in this country. . This calculation is tied to Canada’s regional energy politics and has always been divisive.
Energy Minister Jonathan Wilkinson and Environment Minister Stephen Guilbeault have set out the cap framework and said it will take time for the sector to meet certain targets.
Within 30 minutes after four federal ministers announced the cap, Saskatchewan Premier Scott Moe asserted the province’s jurisdiction and said the cap, along with new regulations to reduce methane emissions, would He said it would create a “bureaucracy and regulatory burden” on the gas sector. . Shortly after, the Alberta government issued a statement calling the cap “punitive” and a “deliberate attack” on Alberta’s economy that “undermines the unity of our country.”
The federal Conservatives, led by Pierre Poièvre, completely condemned the Liberal proposals, without explaining what their party would do instead, saying they would “kill” jobs by moving production overseas and “destroy dictators”. “transferring dollars to the United States,” he claimed.
Difficult calculations of oil and gas emissions
Some of the basic facts underlying this discussion are worth considering.
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Emissions from the oil and gas industry totaled 189 megatonnes (Mt) in 2021, representing 28% of Canada’s total emissions. And they aren’t going down. The sector’s emissions were 183 million tonnes in 2020, and the Climate Institute’s initial projections suggest that emissions from the sector will total 194 million tonnes in 2022.
To reach the goal of net-zero emissions by 2050, a goal Canada shares with the United Nations and 120 other countries, these emissions will need to be significantly reduced. And there are only 27 years left until that happens.
We also know that the industrial sources of these emissions are primarily located in parts of the country that traditionally don’t like to vote Liberal (or appreciate someone named “Trudeau”). It is also important to point out.
Alberta Premier Daniel Smith is committed, at least in theory, to the idea that Canada’s emissions must reach net zero by 2050. So, under the rhetoric (on Thursday she described Environment Minister Stephen Guilbeault as a “threat”) and threats to challenge the constitution, the crux of her argument is that the federal government is simply proposing action too quickly. It’s just that.
But then, how slowly should the industry go?
Under the proposed cap, upstream emissions from the oil and gas sector are expected to fall from a total of 171 million tonnes in 2019 to at least 137 million tonnes by 2030, which This is a 20% reduction in just over 10 years.
That would be progress. But it would also only bring upstream emissions back to roughly 2005 levels. Meanwhile, Canada’s overall national goal is to reduce emissions by at least 40% below 2005 levels.
Ann Estimates published by the Climate Research Institute He predicted last month that all emissions from the oil and gas sector, including those not covered by the cap, could be cut by 110 million tonnes by 2030. This reduction will be achieved through a combination of methane reduction, carbon capture technology, fuel switching and electrification. .
And while Smith and others suggested the government was moving too fast, other voices accused the Liberals of not moving fast enough.
How fast is too fast?
Caroline Brouillette, executive director of the Climate Action Network, said it was “unacceptable” that regulations establishing the cap would not be implemented until 2026. NDP environmental critic Laurel Collins came forward wearing a “loophole” hat, claiming the government “listened to oil and gas lobbyists.”
independent policy experts did raise a concern Last year, when the Liberal Party’s proposal was considered by a parliamentary committee, he spoke about the wisdom of pursuing new policies for the oil and gas sector.
In an ideal world, the Liberals might rely solely on existing policies, particularly a federal price on carbon, to reduce emissions from this sector. And if the Liberal government had settled on less ambitious national targets, there would probably be less reason to worry about cutting emissions from oil and gas quickly.
However, there are still plausible benefits to reducing emissions early, especially for the environment. And the federal government not only imposes requirements on this sector, but also provides investment tax credits to help fund carbon capture projects.
Alberta MP Randy Boissonneau and Energy Minister Jonathan Wilkinson dispute Alberta Premier Daniel Smith’s complaints, saying their plan limits pollution and emissions, not oil and gas production. He claimed that it was for.
Asked on Thursday why the government did not simply increase the existing carbon price, Natural Resources Minister Jonathan Wilkinson said: “A cap provides greater certainty of a reduction than an increase in the carbon price.” .
“And our view is that this sector, like other sectors of the economy, has a real role to play in reducing emissions in line with our goal and the global goal of achieving net zero by 2050. It means we have to fulfill it.”
Although this cap is tied to emissions rather than production, Smith et al. argue that it is a de facto production cap because the requirement would lead to lower production levels. Mr Wilkinson claimed the federal government focused on “what is technically achievable” when designing the cap.
“We’ve spent a lot of time internally, but also in collaboration with experts and industry, to see what we can actually do in a relatively short period of time by 2030,” he said. Ta.
What is realistically achievable remains a matter of debate. Pathways Alliance said Thursday it needed more time to consider the proposal before making a decision. Questions about fairness are inevitable.
But unless some disagreement remains about the need to reduce emissions, and time is of the essence, the only real question is how to reduce them as quickly as possible.
