Alberta
Alberta reaching out to Canadians to help kill Ottawa’s job-killing cap on energy production
Scrap the Cap |
S&P Global Commodity Insights found that a 40 per cent emissions cap could lead to a reduction in oil and natural gas production of one million barrels per day by 2030 and a 2.1-million barrel reduction by 2035.
Independent analysis by the Conference Board of Canada, Deloitte and S&P Global tell the same story: the federal government’s proposed cap would require oil and gas production cuts that would put people out of work and drain billions from Canada’s economy. Despite these reports and continued opposition from many provinces, industry, businesses, experts and Canadians, the federal government will soon release its draft regulations.
The proposed emissions cap is a production cap. S&P Global Commodity Insights found that a 40 per cent emissions cap could lead to a reduction in oil and natural gas production of one million barrels per day by 2030 and a 2.1-million barrel reduction by 2035. According to the Conference Board of Canada and Deloitte, the cap could amount to a more than 10 per cent reduction in oil production and a 16 per cent reduction in conventional gas production in Alberta in 2030.
Alberta’s government is launching a national advertising campaign to inform Canadians that this cap will lead our province and country into economic and societal decline. Alberta would be hit hardest and in 2040, the province’s GDP would shrink by 4.5 per cent. Canada’s would decline by 1 per cent. The cap would result in 150,000 Canadians losing their jobs and the loss of $14 billion a year from the economy. The average Canadian family would be left with up to $419 less per month to spend on groceries, housing or fuel, impacting the quality of life Canadians enjoy coast to coast to coast.
All Canadians deserve to know the dangers of this cap, which will negatively impact their families without reducing global emissions whatsoever.
“Once again, Ottawa is attempting to set policies that are shortsighted and reckless. We’re challenging proposed policy that would stifle our energy industry, kill jobs and ruin economies by launching a national campaign that tells Ottawa to “Scrap the Cap.” We’re telling the federal government to forget this reckless and extreme idea and get behind Alberta’s leadership by investing in real solutions that cut emissions, not Canada’s prosperity.”
The proposed cap will put safe, reliable and secure energy at risk while costing tens of thousands of jobs and billions in lost federal revenue that pays for important programs, services and infrastructure. This means lost jobs, hurt families shuttered businesses and less revenue going to the schools, hospitals, programs and services every Canadian relies on.
If left unchanged, this cap would force Canada’s energy industry to curtail production at the expense of struggling Canadian families. When production is cut, jobs, tax revenues and the economy are cut too. It is, in effect, a cap on prosperity that would be felt across the country.
Alberta is encouraging Canadians to visit the Scrap the Cap website and tell Ottawa they cannot and will not support a cap on energy production that leaves Canadians with a lower standard of living and reduced services. Print, television and social media advertisements will run nationwide from Oct. 15 to the end of November to urge Canadians to contact their member of parliament (MP) and share their thoughts. The Scrap the Cap website includes a letter that can be sent electronically.
“We will not stand by while the federal government threatens tens of thousands of jobs. This production cap means billions in revenues down the drain, and we will not let our province’s – or our country’s – economic future be gutted by an out-of-touch federal government. There is a way to reduce emissions without killing the economy… but this unconstitutional production cap is not it.”
“A cap on oil and gas production will kill jobs and investment and adds to the growing list of federal programs that will kill investments in decarbonization. All Canadians need to let Ottawa know how this cap hurts Alberta and risks Canada’s energy security.”
Alberta is reducing emissions through common sense, incentives and technologies, not taxes or punitive regulations. The oil sands emissions intensity per barrel has fallen 23 per cent since 2009 and is expected to decline another 28 per cent by 2035. Alberta’s overall emissions, electricity emissions and methane emissions are all declining, even as energy demand rises and the economy grows.
The province aspires to be carbon neutral by 2050 without cutting jobs or compromising affordable, reliable and secure energy for Albertans, Canadians and the world.
Related information
- Scrap the Cap website
- Proposed federal oil and gas emissions cap regulatory framework: Government of Alberta technical submission
- Deloitte: Potential Economic Impact of the Proposed Federal Oil and Gas Emissions Cap
- S&P Global Commodity Insights: Economic Impact Assessment of Canadian Conventional Oil and Gas
- Conference Board of Canada: Economic Impacts of a Greenhouse Gas Emissions Cap on the Oil and Gas Sector
- Alberta’s emissions reduction and energy development plan
Related news
- It’s time to scrap the cap: Joint statement (May 27, 2024)
Alberta
Alberta Premier Danielle Smith Discusses Moving Energy Forward at the Global Energy Show in Calgary
From Energy Now
At the energy conference in Calgary, Alberta Premier Danielle Smith pressed the case for building infrastructure to move provincial products to international markets, via a transportation and energy corridor to British Columbia.
“The anchor tenant for this corridor must be a 42-inch pipeline, moving one million incremental barrels of oil to those global markets. And we can’t stop there,” she told the audience.
The premier reiterated her support for new pipelines north to Grays Bay in Nunavut, east to Churchill, Man., and potentially a new version of Energy East.
The discussion comes as Prime Minister Mark Carney and his government are assembling a list of major projects of national interest to fast-track for approval.
Carney has also pledged to establish a major project review office that would issue decisions within two years, instead of five.
Alberta
Punishing Alberta Oil Production: The Divisive Effect of Policies For Carney’s “Decarbonized Oil”
From Energy Now
By Ron Wallace
The federal government has doubled down on its commitment to “responsibly produced oil and gas”. These terms are apparently carefully crafted to maintain federal policies for Net Zero. These policies include a Canadian emissions cap, tanker bans and a clean electricity mandate.
Following meetings in Saskatoon in early June between Prime Minister Mark Carney and Canadian provincial and territorial leaders, the federal government expressed renewed interest in the completion of new oil pipelines to reduce reliance on oil exports to the USA while providing better access to foreign markets. However Carney, while suggesting that there is “real potential” for such projects nonetheless qualified that support as being limited to projects that would “decarbonize” Canadian oil, apparently those that would employ carbon capture technologies. While the meeting did not result in a final list of potential projects, Alberta Premier Danielle Smith said that this approach would constitute a “grand bargain” whereby new pipelines to increase oil exports could help fund decarbonization efforts. But is that true and what are the implications for the Albertan and Canadian economies?
The federal government has doubled down on its commitment to “responsibly produced oil and gas”. These terms are apparently carefully crafted to maintain federal policies for Net Zero. These policies include a Canadian emissions cap, tanker bans and a clean electricity mandate. Many would consider that Canadians, especially Albertans, should be wary of these largely undefined announcements in which Ottawa proposes solely to determine projects that are “in the national interest.”
The federal government has tabled legislation designed to address these challenges with Bill C-5: An Act to enact the Free Trade and Labour Mobility Act and the Building Canada Act (the One Canadian Economy Act). Rather than replacing controversial, and challenged, legislation like the Impact Assessment Act, the Carney government proposes to add more legislation designed to accelerate and streamline regulatory approvals for energy and infrastructure projects. However, only those projects that Ottawa designates as being in the national interest would be approved. While clearer, shorter regulatory timelines and the restoration of the Major Projects Office are also proposed, Bill C-5 is to be superimposed over a crippling regulatory base.
It remains to be seen if this attempt will restore a much-diminished Canadian Can-Do spirit for economic development by encouraging much-needed, indeed essential interprovincial teamwork across shared jurisdictions. While the Act’s proposed single approval process could provide for expedited review timelines, a complex web of regulatory processes will remain in place requiring much enhanced interagency and interprovincial coordination. Given Canada’s much-diminished record for regulatory and policy clarity will this legislation be enough to persuade the corporate and international capital community to consider Canada as a prime investment destination?
As with all complex matters the devil always lurks in the details. Notably, these federal initiatives arrive at a time when the Carney government is facing ever-more pressing geopolitical, energy security and economic concerns. The Organization for Economic Co-operation and Development predicts that Canada’s economy will grow by a dismal one per cent in 2025 and 1.1 per cent in 2026 – this at a time when the global economy is predicted to grow by 2.9 per cent.
It should come as no surprise that Carney’s recent musing about the “real potential” for decarbonized oil pipelines have sparked debate. The undefined term “decarbonized”, is clearly aimed directly at western Canadian oil production as part of Ottawa’s broader strategy to achieve national emissions commitments using costly carbon capture and storage (CCS) projects whose economic viability at scale has been questioned. What might this mean for western Canadian oil producers?
The Alberta Oil sands presently account for about 58% of Canada’s total oil output. Data from December 2023 show Alberta producing a record 4.53 million barrels per day (MMb/d) as major oil export pipelines including Trans Mountain, Keystone and the Enbridge Mainline operate at high levels of capacity. Meanwhile, in 2023 eastern Canada imported on average about 490,000 barrels of crude oil per day (bpd) at a cost estimated at CAD $19.5 billion. These seaborne shipments to major refineries (like New Brunswick’s Irving Refinery in Saint John) rely on imported oil by tanker with crude oil deliveries to New Brunswick averaging around 263,000 barrels per day. In 2023 the estimated total cost to Canada for imported crude oil was $19.5 billion with oil imports arriving from the United States (72.4%), Nigeria (12.9%), and Saudi Arabia (10.7%). Since 1988, marine terminals along the St. Lawrence have seen imports of foreign oil valued at more than $228 billion while the Irving Oil refinery imported $136 billion from 1988 to 2020.
What are the policy and cost implication of Carney’s call for the “decarbonization” of western Canadian produced, oil? It implies that western Canadian “decarbonized” oil would have to be produced and transported to competitive world markets under a material regulatory and financial burden. Meanwhile, eastern Canadian refiners would be allowed to import oil from the USA and offshore jurisdictions free from any comparable regulatory burdens. This policy would penalize, and makes less competitive, Canadian producers while rewarding offshore sources. A federal regulatory requirement to decarbonize western Canadian crude oil production without imposing similar restrictions on imported oil would render the One Canadian Economy Act moot and create two market realities in Canada – one that favours imports and that discourages, or at very least threatens the competitiveness of, Canadian oil export production.
Ron Wallace is a former Member of the National Energy Board.
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