Environment and Climate Change Canada imposes an emissions cap for the oil and gas sector by 2030

Environment and Climate Change Canada imposes an emissions cap for the oil and gas sector by 2030
Environment and Climate Change Canada imposes an emissions cap for the oil and gas sector by 2030

Conservatives from across the country have shown their teeth against the plan to limit emissions from the oil and gas sector for 2030, made official on Monday by the Trudeau government. According to the official opposition in Ottawa, this amounts to killing jobs and funding foreign dictators.

“The ideological crusade of [Justin] Trudeau against Canadian energy must stop. [Le premier ministre] wants to stifle Canada’s energy industry with an arbitrary emissions cap that will devastate Canada’s already broken economy, forcing our allies to buy dirty dictator oil from criminals like Vladimir Putin and the terrorist regime in Tehran,” lamented the Conservative Party of Canada in a statement.

Pierre Poilievre’s party was reacting to the details of a draft regulation unveiled Monday by Environment and Climate Change Canada (ECCC) which plans to impose a cap on greenhouse gas (GHG) emissions in 2030 on the oil and gas sector.

The document has the dual objectives of encouraging green technologies, such as carbon capture and storage, and reducing pollution emitted by the oil and gas sector, responsible for 31% of all Canada’s emissions in 2022.

Alberta Strikes Back

« [Le plafond] will likely prevent investment in oil and gas projects. The result will be lower production, fewer exports, fewer jobs, lower GDP and lower revenues for governments,” added the Canadian Association of Petroleum Producers.

“This ceiling violates the Canadian Constitution,” said the Premier of Alberta, Danielle Smith, who spoke of the use of her recent Act on the sovereignty of Alberta in a united Canada to avoid the measure.

His government financed an advertising campaign consisting of broadcasting the message “throw the ceiling” (“throw out the ceiling”) on a truck driving through the streets of Ottawa (“throw away the ceiling”). scrap the cap “). This was called “stupid actions” by the federal Minister of Environment and Climate Change, Steven Guilbeault.

“This is disinformation from the conservative movement in Canada. Whether [le chef conservateur] Pierre Poilievre, [ou les premiers ministres de l’Alberta et de la Saskatchewan] Danielle Smith or Scott Moe, they claim that climate change does not exist despite the obvious climatic impacts, which are dramatic for the lives of Canadians and for the economy,” he replied in the press scrum.

Surrounded by six other Liberal elected officials, including two ministers, Steven Guilbeault admitted that his regulation, announced again on Monday, but of which we will not see the final version until 2025, could go into the trash if the Conservatives take power. “The best guarantee so that Pierre Poilievre does not undo everything we have done on the environment is to re-elect the Liberal Party. »

For their part, the Bloc Québécois and the New Democratic Party criticized the weak ambition and the expectation of the implementation of this ceiling promised by the Liberals during the 2021 elections.

Increased production

Minister Guilbeault was careful to insist that a cap will not lower the level of oil production. On the contrary, this framework should give sufficient room for maneuver to oil companies to pump 16% more black gold in 2030-2032 compared to 2019.

While increasing its production, the oil and gas sector would no longer be allowed to pollute beyond a certain level, but which the federal government will not calculate for two years. Companies in the sector will have to report their emissions from 2026, then the government will set a cap, at 27% below that year’s levels, for 2030.

ECCC officials estimate that this cap will amount to a 35% reduction in sector emissions compared to 2019, but they cannot guarantee it. A senior official said Monday that he believes the risk of companies suddenly increasing their emissions in 2026, the base year, “is very low” given that it would cost them dearly in waste and federal carbon fees.

According to this target, emissions from oil and gas companies should be around 146 million tonnes in 2030. If the imposed reduction was aligned with the national GHG reduction target, i.e. a decline of 40% compared to 2005, emissions from the sector are expected to be even lower, at 117 million tonnes in 2030.

The emissions cap announced Monday is designed to enable the country to meet still-growing global energy demand. Canada is the fourth largest oil producer and fifth largest gas producer in the world. Sector profits essentially increased 10-fold during the pandemic ($6.6 billion in 2019 versus $66.6 billion in 2022).

Even if the cap only targets large producers (365,000 barrels of oil per year and more) and they will be allowed to exchange offset credits among themselves or purchase “decarbonization units” at $50 per ton of CO2Ottawa hopes the measure will encourage decarbonization enough to save $4 billion in damages from climate change worldwide. Canada would see a net gain of $428 million.

With Alexander Shields

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