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Ottawa should scrap its oil and gas emissions cap plan

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From the Fraser Institute

By Elmira Aliakbari and Julio Mejía

Ottawa’s proposed GHG cap, which solely targets the oil and gas industry while exempting the remaining 73.4 per cent of the country’s GHG emissions, lacks a scientific rationale.

Once again, Alberta is at odds with the federal government, this time over proposed regulations, which would impose a cap on greenhouse gas (GHG) emissions in the oil and gas sector, with the goal of reducing emissions by 35 to 38 per cent by 2030 (relative to 2019 levels).

The Smith government fiercely opposes these regulations and recently submitted formal feedback to Ottawa. While the federal government says these regulations are necessary to combat climate change, in the reality they will impose significant costs on Canadians without yielding detectable environmental benefits.

Firstly, it’s a universally accepted fact that a unit of carbon dioxide has the same atmospheric effect regardless of its source, be it from an oilsands mine in Alberta, a manufacturer in Quebec or a steel mill in Ontario. CO2 is CO2 is CO2. Therefore, Ottawa’s proposed GHG cap, which solely targets the oil and gas industry while exempting the remaining 73.4 per cent of the country’s GHG emissions, lacks a scientific rationale.

Moreover, Canada already has a national carbon tax aimed at reducing GHG emissions. Stacking a GHG cap on top of the carbon tax contradicts the rationale for a carbon tax and would likely result in emissions reduction at a very high cost. According to a recent economic analysis by the Conference Board of Canada, the cap could reduce Canada’s economy (i.e. GDP) by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.

These new findings echo earlier studies, which show the proposed cap’s large costs and little benefits. For instance, a recent study found that an emissions cap on the oil and gas sector would inevitably reduce production and exports, leading to at least $45 billion in lost economic activity in 2030 alone, accompanied by a substantial drop in government revenue.

Again, these large economic costs come with almost no discernible environmental benefit. Even if Canada were to entirely shut down its oil and gas sector by 2030, thus eliminating all GHG emissions from the sector, the resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent (i.e. 0.004 per cent) with virtually no impact on the climate or any detectable environmental, health or safety benefits.

Meanwhile, every credible forecast of world energy consumption indicates that oil and gas will continue to dominate the global energy supply mix for decades. Given the sustained demand for fossil fuels, constraining oil and gas production and exports in Canada would merely shift production to other regions, potentially to countries with lower environmental and human rights standards such as Iran, Russia and Venezuela.

Clearly, this is an opportunity for Canada, which possesses abundant reserves of natural gas (a cleaner alternative to coal), to play a pivotal role in reducing global GHG emissions. Countries such as China, which is grappling with rising energy demands, are eager to reduce their heavy reliance on coal. And several countries including Germany want to diversify away from Russian gas for geopolitical and energy security reasons. By expanding our natural gas resources, Canada could unleash significant economic activity (jobs, revenue, etc.) while reducing global GHG emissions and improving global energy security.

The Trudeau government will likely publish a draft version of the regulations, which will include the cap, sometime in the next few months. The cap plan lacks any scientific, economic or environmental rationale so the government should scrap the cap for the benefit of Canadians and the world.

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Alberta

Pierre Poilievre – Per Capita, Hardisty, Alberta Is the Most Important Little Town In Canada

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From Pierre Poilievre

The tiny town of Hardisty, Alberta (623 people) moves $90 billion in energy a year—that’s more than the GDP of some countries.

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Business

Why it’s time to repeal the oil tanker ban on B.C.’s north coast

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The Port of Prince Rupert on the north coast of British Columbia. Photo courtesy Prince Rupert Port Authority

From the Canadian Energy Centre

By Will Gibson

Moratorium does little to improve marine safety while sending the wrong message to energy investors

In 2019, Martha Hall Findlay, then-CEO of the Canada West Foundation, penned a strongly worded op-ed in the Globe and Mail calling the federal ban of oil tankers on B.C.’s northern coast “un-Canadian.”

Six years later, her opinion hasn’t changed.

“It was bad legislation and the government should get rid of it,” said Hall Findlay, now director of the University of Calgary’s School of Public Policy.

The moratorium, known as Bill C-48, banned vessels carrying more than 12,500 tonnes of oil from accessing northern B.C. ports.

Targeting products from one sector in one area does little to achieve the goal of overall improved marine transport safety, she said.

“There are risks associated with any kind of transportation with any goods, and not all of them are with oil tankers. All that singling out one part of one coast did was prevent more oil and gas from being produced that could be shipped off that coast,” she said.

Hall Findlay is a former Liberal MP who served as Suncor Energy’s chief sustainability officer before taking on her role at the University of Calgary.

She sees an opportunity to remove the tanker moratorium in light of changing attitudes about resource development across Canada and a new federal government that has publicly committed to delivering nation-building energy projects.

“There’s a greater recognition in large portions of the public across the country, not just Alberta and Saskatchewan, that Canada is too dependent on the United States as the only customer for our energy products,” she said.

“There are better alternatives to C-48, such as setting aside what are called Particularly Sensitive Sea Areas, which have been established in areas such as the Great Barrier Reef and the Galapagos Islands.”

The Business Council of British Columbia, which represents more than 200 companies, post-secondary institutions and industry associations, echoes Hall Findlay’s call for the tanker ban to be repealed.

“Comparable shipments face no such restrictions on the East Coast,” said Denise Mullen, the council’s director of environment, sustainability and Indigenous relations.

“This unfair treatment reinforces Canada’s over-reliance on the U.S. market, where Canadian oil is sold at a discount, by restricting access to Asia-Pacific markets.

“This results in billions in lost government revenues and reduced private investment at a time when our economy can least afford it.”

The ban on tanker traffic specifically in northern B.C. doesn’t make sense given Canada already has strong marine safety regulations in place, Mullen said.

Notably, completion of the Trans Mountain Pipeline expansion in 2024 also doubled marine spill response capacity on Canada’s West Coast. A $170 million investment added new equipment, personnel and response bases in the Salish Sea.

“The [C-48] moratorium adds little real protection while sending a damaging message to global investors,” she said.

“This undermines the confidence needed for long-term investment in critical trade-enabling infrastructure.”

Indigenous Resource Network executive director John Desjarlais senses there’s an openness to revisiting the issue for Indigenous communities.

“Sentiment has changed and evolved in the past six years,” he said.

“There are still concerns and trust that needs to be built. But there’s also a recognition that in addition to environmental impacts, [there are] consequences of not doing it in terms of an economic impact as well as the cascading socio-economic impacts.”

The ban effectively killed the proposed $16-billion Eagle Spirit project, an Indigenous-led pipeline that would have shipped oil from northern Alberta to a tidewater export terminal at Prince Rupert, B.C.

“When you have Indigenous participants who want to advance these projects, the moratorium needs to be revisited,” Desjarlais said.

He notes that in the six years since the tanker ban went into effect, there are growing partnerships between B.C. First Nations and the energy industry, including the Haisla Nation’s Cedar LNG project and the Nisga’a Nation’s Ksi Lisims LNG project.

This has deepened the trust that projects can mitigate risks while providing economic reconciliation and benefits to communities, Dejarlais said.

“Industry has come leaps and bounds in terms of working with First Nations,” he said.

“They are treating the rights of the communities they work with appropriately in terms of project risk and returns.”

Hall Findlay is cautiously optimistic that the tanker ban will be replaced by more appropriate legislation.

“I’m hoping that we see the revival of a federal government that brings pragmatism to governing the country,” she said.

“Repealing C-48 would be a sign of that happening.”

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