Dear Minister Steven Guilbeault,

The federal government’s draft Regulatory Framework to Cap Oil and Gas Sector Greenhouse Gas Emissions represents a de facto production cap on Alberta’s oil and gas sector. This cap is not realistic or effective, will not achieve its grandiose emissions targets, and will not be tolerated in Alberta.

Today, Alberta is efficiently and effectively regulating and driving emissions from all industrial sectors, including oil and gas, and has been doing so successfully for decades. Our technical submission outlines how your proposed oil and gas emissions cap will undercut this work, and the severe consequences that it will impose on Albertans and all Canadians.

In no way does Alberta’s technical submission alter our province’s position that the proposed emissions cap is unconstitutional. As set out in Section 92A of the Constitution Act, 1867, Alberta has exclusive jurisdiction to manage the rate of non-renewable natural resources production and operational aspects of their development in our province.

If implemented, this cap would have a devastating impact on the economies of Alberta and all of Canada. Analysis from the Conference Board of Canada shows that it would reduce Canada’s GDP by up to $1 trillion between 2030 and 2040 and create up to 151,000 lost jobs across Canada by 2030. Oil and gas production would be curtailed, tens of thousands could be out of work, and the economic impact would be felt from coast to coast.

We have identified an overwhelming number of flaws in your government’s proposed framework. For example, your assumed production forecasts – which form the basis of the cap – are from 2019. Alberta’s total oil and natural gas production has already risen past 2019 levels, and multiple forecasts project oil sands production to increase significantly by 2030. Similarly, the technologies needed to massively abate emissions in the oil and gas sector either don’t yet exist or aren’t being developed at the rate and scale that your modelling requires.

Many of these technologies and investments are supported by Alberta and will eventually deliver real and sustained reductions, but not by 2030. As well, our submission clearly demonstrates that:

• The proposed cap would violate Section 92A of the Constitution, and result in oil and gas production cuts and shut-ins in Alberta.

• It is based on a flawed regulatory framework and policy design that is ineffective, inefficient and will not produce the intended emission reductions.

• The proposed cap will negatively impact Alberta’s economy, as well as the economies of provinces and territories across the country, including the Canadian economy overall.

• It will undercut Canada’s competitiveness and drastically reduce investments in clean technologies like carbon capture, which are critical to meaningfully reducing emissions in the coming years.

• It is unnecessary and will undermine effective provincial-led decarbonizing approaches and initiatives already underway or proposed in Alberta and across Canada.

• It will lead to carbon leakage, with oil and gas production and greenhouse gas emissions increasing in other countries with less robust environmental and human rights standards.

Alberta is confident that the many of issues raised in this document are shared by other provinces and industry leaders, both within the oil and gas sector and beyond.

All greenhouse gas emissions have the same global impact, regardless of the sector or region in which they are produced. Instead of pursuing this unconstitutional cap, we are calling on your government to immediately halt further development and begin meaningful collaboration within established provincial regulatory regimes on oil and gas regulation and emissions reductions.

Alberta would welcome federal investment to help the oil and gas industry – and other industries – advance and adopt technology to reduce emissions to support our goals of carbon neutrality by 2050.

Alberta aspires to achieve a carbon neutral economy without compromising affordable, reliable, and secure energy for Alberta, Canada and the world. We know this relies on and requires investment to advance clean technology solutions.

We invite you to join us in implementing our Emissions Reduction and Energy Development Plan to achieve carbon neutrality while continuing the development of Alberta’s world-class natural energy resources for Canada and the world.

Sincerely,
Rebecca Schulz
Minister of Environment and Protected Areas