Canadian Energy Centre
Business leaders blast Ottawa’s ‘unnecessary and unacceptable’ oil and gas emissions cap
From the Canadian Energy Centre
The federal government is proceeding with its plans to cap emissions from the oil and gas industry in a move business leaders say will ultimately hurt Indigenous communities and everyday Canadians.
The Business Council of Canada called the cap part of a “full-on charge against the oil and gas sector.”
The government announced on December 7 that it will implement measures to cap oil and gas emissions in 2030 at 35 to 38 percent below 2019 levels. A similar cap has not been announced for any other industry.
“It all seems punitive and short-sighted,” wrote Business Council of Canada vice-president Michael Gullo and Theo Argitis, managing director of Compass Rose Group.
A cap on production
They don’t put much stock into the government’s claims that the cap is not intended to limit Canada’s oil and gas production.
“That’s semantics. To work, a cap would ultimately need to be severe enough to curtail production if needed, and that would have significant economic consequences,” Gullo and Argitis said, warning of a “direct and immediate” loss of income for Canada’s economy.
“There would be significant indirect costs as well, incurred by every household and business across the nation because Canada relies on income generated by oil and gas companies—totaling $270 billion in 2022 alone—to support social programs like health care, education, and infrastructure,” they wrote.
Already on the path to net zero
On the world’s current trajectory, oil and gas will still account for 46 per cent of world energy needs in 2050, down only moderately from 51 per cent in 2022, according to the International Energy Agency.
Industry leaders argue that Canada’s oil and gas producers are already on the path to net zero emissions without the need for the cap.
According to Environment and Climate Change Canada’s latest report to the United Nations, emissions from so-called “conventional” (non-oil sands) production declined to 26 megatonnes in 2021, from 34 megatonnes in 2019.
Producers in Alberta have already reduced total methane emissions by 45 per cent compared to 2014, hitting the target three years ahead of schedule.
Oil sands emissions did not increase last year despite production growth, and total emissions are expected to start going down before 2025, according to S&P Global.
“Imposing an emissions cap on Canada’s oil and gas producers, who are already achieving significant emissions reductions as shown in the federal government’s own data, is unnecessary and unacceptable,” the Explorers and Producers Association of Canada said in a statement.
A cap on Indigenous opportunity
The Indigenous Resource Network (IRN) – which advocates for Indigenous participation in resource projects – said the cap would be “devastating” for Indigenous communities.
“A pathway to self-determination is being achieved through the ownership of oil and gas projects and involvement in the sector,” said IRN executive director John Desjarlais.
“This would result in a cap on Indigenous opportunity in the oil and gas sector.”
Desjarlais said the IRN is seeking an exemption from the cap for Indigenous communities who are engaged in oil and gas development.
He said the proposed cap directly contradicts the government’s promises on reconciliation and its support for the United Nations Declaration on the Rights of Indigenous People.
Counter–approach to the United States
The approach of capping emissions runs counter to the incentive-based approach being pursued in the United States, the Canadian Association of Energy Contractors (CAOEC) said in a statement.
“There, the Inflation Reduction Act has attracted capital and accelerated low-carbon technology and innovation in the energy sector at the expense of Canadian businesses and workers,” the CAOEC said.
Ottawa has yet to finalize announced investment tax credits to support clean technologies like hydrogen production and carbon capture, utilization and storage (CCUS), the Business Council of Canada noted.
“We have engaged the federal government in good faith over the past two years and have asked them to partner with us to accelerate the deployment of carbon abatement technology. As of today, we have received no support from this government,” said CAOEC president Mark Scholz.
“Stop working against us and start working with us.”
Final regulations on the proposed emissions cap are expected in 2025.
Alberta
The case for expanding Canada’s energy exports
From the Canadian Energy Centre
For Canada, the path to a stronger economy — and stronger global influence — runs through energy.
That’s the view of David Detomasi, a professor at the Smith School of Business at Queen’s University.
Detomasi, author of Profits and Power: Navigating the Politics and Geopolitics of Oil, argues that there is a moral case for developing Canada’s energy, both for Canadians and the world.
CEC: What does being an energy superpower mean to you?
DD: It means Canada is strong enough to affect the system as a whole by its choices.
There is something really valuable about Canada’s — and Alberta’s — way of producing carbon energy that goes beyond just the monetary rewards.
CEC: You talk about the moral case for developing Canada’s energy. What do you mean?
DD: I think the default assumption in public rhetoric is that the environmental movement is the only voice speaking for the moral betterment of the world. That needs to be challenged.
That public rhetoric is that the act of cultivating a powerful, effective economic engine is somehow wrong or bad, and that efforts to create wealth are somehow morally tainted.
I think that’s dead wrong. Economic growth is morally good, and we should foster it.
Economic growth generates money, and you can’t do anything you want to do in social expenditures without that engine.
Economic growth is critical to doing all the other things we want to do as Canadians, like having a publicly funded health care system or providing transfer payments to less well-off provinces.
Over the last 10 years, many people in Canada came to equate moral leadership with getting off of oil and gas as quickly as possible. I think that is a mistake, and far too narrow.
Instead, I think moral leadership means you play that game, you play it well, and you do it in our interest, in the Canadian way.
We need a solid base of economic prosperity in this country first, and then we can help others.
CEC: Why is it important to expand Canada’s energy trade?
DD: Canada is, and has always been, a trading nation, because we’ve got a lot of geography and not that many people.
If we don’t trade what we have with the outside world, we aren’t going to be able to develop economically, because we don’t have the internal size and capacity.
Historically, most of that trade has been with the United States. Geography and history mean it will always be our primary trade partner.
But the United States clearly can be an unreliable partner. Free and open trade matters more to Canada than it does to the U.S. Indeed, a big chunk of the American people is skeptical of participating in a global trading system.
As the United States perhaps withdraws from the international trading and investment system, there’s room for Canada to reinforce it in places where we can use our resource advantages to build new, stronger relationships.
One of these is Europe, which still imports a lot of gas. We can also build positive relationships with the enormous emerging markets of China and India, both of whom want and will need enormous supplies of energy for many decades.
I would like to be able to offer partners the alternative option of buying Canadian energy so that they are less reliant on, say, Iranian or Russian energy.
Canada can also maybe eventually help the two billion people in the world currently without energy access.
CEC: What benefits could Canadians gain by becoming an energy superpower?
DD: The first and primary responsibility of our federal government is to look after Canada. At the end of the day, the goal is to improve Canada’s welfare and enhance its sovereignty.
More carbon energy development helps Canada. We have massive debt, an investment crisis and productivity problems that we’ve been talking about forever. Economic and job growth are weak.
Solving these will require profitable and productive industries. We don’t have so many economic strengths in this country that we can voluntarily ignore or constrain one of our biggest industries.
The economic benefits pay for things that make you stronger as a country.
They make you more resilient on the social welfare front and make increasing defence expenditures, which we sorely need, more affordable. It allows us to manage the debt that we’re running up, and supports deals for Canada’s Indigenous peoples.
CEC: Are there specific projects that you advocate for to make Canada an energy superpower?
DD: Canada’s energy needs egress, and getting it out to places other than the United States. That means more transport and port facilities to Canada’s coasts.
We also need domestic energy transport networks. People don’t know this, but a big chunk of Ontario’s oil supply runs through Michigan, posing a latent security risk to Ontario’s energy security.
We need to change the perception that pipelines are evil. There’s a spiderweb of them across the globe, and more are being built.
Building pipelines here, with Canadian technology and know-how, builds our competitiveness and enhances our sovereignty.
Economic growth enhances sovereignty and provides the resources to do other things. We should applaud and encourage it, and the carbon energy sector can lead the way.
Business
Oil tanker traffic surges but spills stay at zero after Trans Mountain Expansion
From the Canadian Energy Centre
Bigger project maintains decades-long marine safety record
The Trans Mountain system continues its decades-long record of zero marine spills, even as oil tanker traffic has surged more than 800 per cent since the pipeline’s expansion in May 2024.
The number of tankers calling at Trans Mountain’s Westridge Marine Terminal in the Port of Vancouver in one month now rivals the number that used to go through in one year.
A global trend toward safer tanker operations
Trans Mountain’s safe operations are part of a worldwide trend. Global oil tanker traffic is up, yet spills are down, according to the International Tanker Owners Pollution Federation, a London, UK-based nonprofit that provides data and response support.
Transport Canada reports a 95 per cent drop in ship-source oil spills and spill volumes since the 1970s, driven by stronger ship design, improved response and better regulations.
“Tankers are now designed much more safely. They are double-hulled and compartmentalized to mitigate spills,” said Mike Lowry, spokesperson for the Western Canada Marine Response Corporation (WCMRC).
WCMRC: Ready to protect the West Coast
One of WCMRC’s new response vessels arrives in Barkley Sound. Photo courtesy Western Canada Marine Response Corporation
From eight marine bases including Vancouver and Prince Rupert, WCMRC stands at the ready to protect all 27,000 kilometres of Canada’s western coastline.
Lowry sees the corporation as similar to firefighters — training to respond to an event they hope they never have to see.
In September, it conducted a large-scale training exercise for a worst-case spill scenario. This included the KJ Gardner — Canada’s largest spill response vessel and a part of WCMRC’s fleet since 2024.
“It’s part of the work we do to make sure everybody is trained and prepared to use our assets just in case,” Lowry said.
Expanding capacity for Trans Mountain
The K.J. Gardner is the largest-ever spill response vessel in Canada. Photo courtesy Western Canada Marine Response Corporation
WCMRC’s fleet and capabilities were doubled with a $170-million expansion to support the Trans Mountain project.
Between 2012 and 2024, the company grew from 13 people and $12 million in assets to more than 200 people and $213 million in assets.
“About 80 per cent of our employees are mariners who work as deckhands, captains and marine engineers on our vessels,” Lowry said.
“Most of the incidents we respond to are small marine diesel spills — the last one was a fuel leak from a forest logging vessel near Nanaimo — so we have deployed our fleet in other ways.”
Tanker safety starts with strong rules and local expertise
Tanker loading at the Westridge Marine Terminal in the Port of Vancouver. Photo courtesy Trans Mountain Corporation
Speaking on the ARC Energy Ideas podcast, Trans Mountain CEO Mark Maki said tanker safety starts with strong regulations, including the use of local pilots to guide vessels into the harbour.
“On the Mississippi River, you have Mississippi River pilots because they know how the river behaves. Same thing would apply here in Vancouver Harbour. Tides are strong, so people who are familiar with the harbor and have years and decades of experience are making sure the ships go in and out safely,” Maki said.
“A high standard is applied to any ship that calls, and our facility has to meet very strict requirements. And we have rejected ships, just said, ‘Nope, that one doesn’t fit the bill.’ A ship calling on our facilities is very, very carefully looked at.”
Working with communities to protect sensitive areas
Beyond escorting ships and preparing for spills, WCMRC partners with coastal communities to map sensitive areas that need rapid protection including salmon streams, clam beds and culturally important sites like burial grounds.
“We want to empower communities and nations to be more prepared and involved,” Lowry said.
“They can help us identify and protect the areas that they value or view as sensitive by working with our mapping people to identify those areas in advance. If we know where those are ahead of time, we can develop a protection strategy for them.”
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