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Proposed emissions cap on oil and gas sector overly ambitious’: CNRL

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CALGARY — The head of Canada’s largest oil-and-gas producing company criticized the federal government’s proposed emissions cap for the energy sector Thursday, arguing environmental goals must be balanced with economic and energy security concerns.

Canadian Natural Resources Ltd. president Tim McKay made the comments during a conference call with analysts. While the purpose of the call was to discuss the company’s second-quarter financial results, McKay took aim at Ottawa’s proposed cap in his opening remarks.

He also talked up the emissions reduction efforts that are already underway through Pathways Alliance, an industry group that includes CNRL and other major Canadian oilsands producers.

“In our view, this (federal) cap is unnecessary and overly ambitious in light of our stated preference for government and industry to continue to work together through the Pathways initiative to achieve an already announced emissions reduction target,” McKay said.

“It is important for all parties to continue to work together.”

The federal government indicated earlier this year that it would impose a cap on greenhouse gas emissions from the oil and gas sector in order to enable Canada to meet its 2030 emissions reduction target.

While the government has so far not indicated what the allowable level of emissions will be, it issued a discussion paper earlier this month that said it is considering two options — a cap-and-trade system that will set regulated limits on emissions from the sector, or a modified carbon pricing system for heavy emitters that would see oil-and-gas players pay a higher carbon price.

“As presented, both emissions cap options have the potential to limit oil and natural gas production in Canada by adding regulatory burden and eliminating options for economywide co-operation on emissions reductions,” said Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, in an emailed statement Thursday.

The federal government has stated it believes Canada’s oilpatch is capable of reducing emissions by 31 per cent below 2005 levels by 2030, or 42 per cent below 2019 levels. (Emissions from the sector have risen by 20 per cent since 2005, due to increased production, though emissions intensity per barrel has decreased).

That would bring total emissions from the sector — including production, refining and transportation via pipelines — to 110 million tonnes by 2030, down from 191 million tonnes in 2019. They haven’t been that low in more than three decades.

Oilsands industry leaders have suggested meeting such an ambitious target in a relatively short time frame is likely unachievable. Instead, they have set their own targets through the Pathways Alliance, pledging to reduce oilsands production emissions by 22 million tonnes by 2030. That would represent an approximate 30 per cent reduction from current levels.

Key to the industry’s plan is a proposed carbon capture and storage project that would capture CO2 from oilsands facilities and transport it to a storage facility near Cold Lake, Alta., delivering about 10 million tonnes of emissions reductions per year from oilsands production.

Pathways Alliance members have not yet pulled the trigger to go ahead with the project, though the group has said the investment tax credit for carbon capture and storage projects unveiled by the federal government earlier this year is an important step.

“The tax credit is a positive approach where industry and government can co-invest in CCUS infrastructure at an achievable pace of development,” McKay said Thursday.

CNRL reported Thursday that it more than doubled its second-quarter profits in 2022 as the war in Ukraine continued to put pressure on global energy supplies. The Calgary-headquartered company said it earned $3.5 billion or $3 per diluted share for the quarter ended June 30, up from $1.6 billion or $1.30 per diluted share in the same quarter last year.

Crude prices spiked during the quarter, driven largely by Russia’s invasion of Ukraine, with North American benchmark WTI up 15 per cent from the first quarter and up 64 per cent from last year’s second quarter.

Canadian Natural’s daily production, before royalties, averaged 1,211,147 barrels of oil equivalent per day in the quarter, up from 1,141,739 in the same quarter last year.

The company increased its production guidance for 2022 by two per cent on Thursday, and said it now expects to add 40 million barrels of oil equivalent per day of growth in 2023, and 96 million barrels of oil equivalent per day of growth by 2025. It increased its 2022 total budget for capital expenditures by $575 million to $4.9 billion, saying it will drill 15 additional thermal in situ wells this year.

CNRL also announced Thursday a special dividend of $1.50 per common share, citing what the company called its “very robust” financial position, rapidly decreasing debt levels, and “significant” free cash flow. The special dividend will be payable Aug. 31 to shareholders of record by end of day Aug. 23.

This report by The Canadian Press was first published Aug. 4, 2022.

Companies in this story: (TSX:CNQ)

Amanda Stephenson, The Canadian Press

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Alberta

Red Deer South MLA lambastes Premier Kenney for weighing in on the race to replace him

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Article submitted by Red Deer South MLA Jason Stephan

Kenney, the time for you to be quiet is now

When you are a departing leader of a political party, one of your responsibilities is to build unity. One way of doing so is to stay out of the leadership race to replace you. Jason Kenney promised he was not going to be a “color commentator” in the race, and then proceeded to become one. Kenney misrepresented a platform commitment of Danielle Smith —a leading candidate—sowing division and creating disunity.

While misrepresenting the ideas of others and then attacking the straw men manufactured out of the misrepresentation may be standard practice in a junior high school debate, it’s dishonest and disrespectful.

Kenney called the Alberta Sovereignty Act “nuts” and “nuttier than a squirrel turd”. Is that going to produce unity? In his leadership review, when he called those who disagreed with him “bugs”, “kooks” and “lunatics”, how did that work out
for him?

Kenney says the Sovereignty Act would make Alberta the “laughingstock” of Canada. Perhaps we already are.

When Albertans held a provincial referendum and rejected equalization, who did Trudeau appoint as environment minister? He chose Steven Guilbeault, the Greenpeace activist, arrested for climbing on Ralph Klein’s roof when he was away, frightening Klein’s wife who was home alone. I bet Trudeau thought that was funny.

What does Trudeau do with Kenney’s sternly worded letters? Perhaps they are trophies he hangs on the walls.

The premier of Quebec said one of his favorite things about Canada is equalization, so what progress has Kenney made on equalization? None.

The Sovereignty Act seeks to do what Quebec does. Is Quebec a laughingstock?

Kenney says the Sovereignty Act would be a “body blow” to Alberta jobs and the economy and “draw massive investment away”. Isn’t that going to be the result of Trudeau’s new “discussion paper?”

This paper was released in August with a submission deadline in September. It proposes either a new cap-and-trade or carbon tax only on oil and gas development, disproportionately punishing Alberta while sparing Quebec and other provinces that Trudeau bribes for power.

Kenney should consider stopping his straw man attacks and start focusing on Ottawa where he came from. No straw man is required as Ottawa is already responsible for driving away hundreds of billions in investment out of Alberta and thousands of Alberta jobs with it along with more “body blows” to come if we get this imminent new cap and trade or new carbon tax imposed on our natural resources.

Is Kenney working on his latest sternly worded letter?

But wait, under section 92A of Canada’s constitution, isn’t Alberta supposed to have jurisdiction over the development of our natural resources? Isn’t Trudeau again seeking to do indirectly what he cannot do directly? Isn’t this a sneaky,
backdoor, constitutional trojan horse? Isn’t this what the Sovereignty Act is intended to address, to assert constitutional boundaries that Ottawa continually seeks to circumvent, trespass, attack and undermine? When Ottawa abuses its
power, isn’t the Sovereignty Act to be a check and balance?

Yes, a good idea, improperly applied can be detrimental, and if that is the version that Kenney wants to manufacture, attack, and fearmonger, that is his choice.

Properly applied the Sovereignty Act will benefit Alberta, counteracting the commercial uncertainty and chaos from Ottawa by asserting the constitutional boundaries that Ottawa habitually disrespects, seeking to undermine and intrude into
Alberta’s constitutional jurisdiction to develop its oil and gas resources.

Kenney says the Sovereignty Act does not respect the rule of law.

Properly applied the Sovereignty Act supports the rule of law as it asserts Alberta’s constitutional jurisdictions and resists abuses of power emanating out of Ottawa.

Kenney says he “isn’t really following the leadership race”. He is.

Kenney started saying he does not know which candidates are supporting the Sovereignty Act. He knows.

He also knew the deadline for members to participate in the leadership race had ended the day before he chose to improperly misrepresent a platform policy of a leading candidate who is not part of his inner circle.

Great leaders speak the truth in love inspiring the best in those they serve. They do not fearmonger, they do not call names, they do not misrepresent others’ ideas and then attack the straw men they manufactured with their misrepresentations.

It is disappointing to see Kenney failing in his responsibility to build unity. I have faith his successor will do better.

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Alberta

Edmonton gondola needed better Indigenous consultation, councillor says

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By Angela Amato in Edmonton

The sole city councillor to vote in support of a gondola across Edmonton’s river valley says the outcome may have been different if there were better Indigenous consultation.

A recommendation that a city agreement with Prairie Sky Gondola be terminated passed 12 to one on Monday.

Karen Principe, councillor for Ward Tastawiyiniwak, was the lone vote against nixing the project.

But she says more meaningful consultations with Indigenous people were needed before signing the land-lease agreement with Prairie Sky.

The gondola project has been criticized for several reasons, including financial risks to the city and controversy around building on the Rossdale Burial Site.

The Rossdale Burial Site is an Indigenous burial ground that has been recognized as a cemetery by the City of Edmonton since 2005.

The decision comes after a meeting last week where citizens, councillors and the Prairie Sky Gondola team discussed the project.

“It was a very tough decision,” said Principe. “I just thought that it was such a great, creative idea and something unique for Edmontonians.”

Chief Darlene Misik of Papaschase First Nation sent out a statement Thursday, saying her community supported the Prairie Sky Gondola Land Agreement.

“Without this opportunity to access and develop our significant presence beyond the appearance of what is quite frankly an unkept cemetery, the city will wait yet another 15 years or until something else triggers a discussion before considering that perhaps something should be done at the Rossdale Flats,” Misik wrote.

Nisha Patel,The sole city councillor to vote in support of a gondola across Edmonton’s river valley says the outcome may have been different if there were better Indigenous consultation.

A recommendation that a city agreement with Prairie Sky Gondola be terminated passed 12 to one on Monday.

Karen Principe, councillor for Ward Tastawiyiniwak, was the lone vote against nixing the project.

But she says more meaningful consultations with Indigenous people were needed before signing the land-lease agreement with Prairie Sky.

The gondola project has been criticized for several reasons, including financial risks to the city and controversy around building on the Rossdale Burial Site.

The Rossdale Burial Site is an Indigenous burial ground that has been recognized as a cemetery by the City of Edmonton since 2005.

The decision comes after a meeting last week where citizens, councillors and the Prairie Sky Gondola team discussed the project.

“It was a very tough decision,” said Principe. “I just thought that it was such a great, creative idea and something unique for Edmontonians.”

Chief Darlene Misik of Papaschase First Nation sent out a statement Thursday, saying her community supported the Prairie Sky Gondola Land Agreement.

“Without this opportunity to access and develop our significant presence beyond the appearance of what is quite frankly an unkept cemetery, the city will wait yet another 15 years or until something else triggers a discussion before considering that perhaps something should be done at the Rossdale Flats,” Misik wrote.

Nisha Patel, former Edmonton poet laureate and disability justice activist, wrote an essay against the gondola.

“I feel immensely grateful to the amount of people who fought and reasoned for this outcome,” Patel said.

Patel’s essay focused on the Indigenous burial site, the city’s transit needs and the financial implications of the project.

“As someone who has lived in areas with low to no transit options and now lives in a high transit corridor, I’m very sympathetic to the many folks who rely on transit alone.”

While the city has halted the project, Prairie Sky Gondola could still revise its plan and propose the project again.

This report by The Canadian Press was first published Aug. 16, 2022

This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.

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