Alberta NDP caps tar sands emissions?

Claudia Cattaneo

[Wepage editor's note: A law to INCREASE emissions from 66 to 100 megatons is not a cap, it is legalized climate vandalism.]


Nov 1, 2016 - Alberta’s NDP government moved to put into law Tuesday the costliest aspect of its climate leadership plan – a 100 megatonne-a-year cap on emissions from the oilsands.

The hope is the hard cap that will strand some of the resource will win federal permits for pipelines and Alberta recognition for sacrificing its most valuable asset.

The gamble is that investors will stick around rather than go where there are no such restrictions — like every other oil and gas producing jurisdiction — and that Albertans will embrace it.

Angst over the province’s aggressive environmental initiatives during a distressed economy suggests otherwise. To make the point, busloads were scheduled to leave from Calgary and Red Deer Wednesday for a rally at the legislature in Edmonton in support of the energy sector.

But Shannon Phillips, Alberta’s environment minister, said that Alberta can either design the future of the industry or it will be designed somewhere else.

“There is no nostalgic previous era where no one objected to greenhouse gas pollution or the climate change it causes,” Phillips told reporters before introducing the Oil Sands Limit Emissions Act.

“With this bill Alberta makes clear to the world that energy-producing jurisdictions can establish limits and work and thrive in a carbon constrained future.”

The cap, proposed by a group of four industry and four environmental movement leaders, was announced last November by Rachel Notley’s government.

The province said it expects to hit the limit, based on production projections, around 2030. The legislation comes just as Prime Minister Justin Trudeau is getting ready to announce a decision on the controversial expansion of the TransMountain pipeline from Alberta to Vancouver.

Emissions from the oilsands in 2014 were 66 megatonnes, representing 24 per cent of Alberta’s GHG emissions and nine per cent of Canada’s emissions. The cap applies to emissions from all sites, including in-situ, mining and upgrading operations.

New upgrading will be subject to an additional 10-megatonne limit as part of the government’s agenda to increase value-added bitumen processing.

Some electricity produced at oilsands facility will be exempted, as will production from oilsands that uses primary methods.

Phillips said a panel appointed in the summer would make recommendations early in 2017 on how to divvy up the remaining carbon budget and how to handle stranded resources. The panel includes representatives from industry, aboriginals and green groups. One of its co-chairs is anti-oilsands activist Tzeporah Berman, the former co-director of Greenpeace International’s global climate and energy program and Co-founder of ForestEthics.

Phillips suggested that industry itself accepts that some of the resource won’t be developed. Steve Williams, the CEO of top oilsands producer Suncor Energy Inc., noted that some of the resources would be too costly to develop, she said.

“Business decisions will be made based in part on input cost on carbon,” she said.

Phillips said the legislation provides certainty to investors and pushes industry to innovate.

“Alberta got the oil out of the sand, we can now get the carbon out of the barrel,” she said.

Alberta’s climate change plan includes a $3 billion a year carbon tax, phasing out power generation from coal plants that will result in stranded coal assets, new costs to build wind and solar power and infrastructure to get it to consumers, and reducing methane emissions from oil and gas operations.

In a recent study, the Fraser Institute’s Ken Green and Taylor Jackson said the oilsands cap is one of the costliest methods of abating greenhouse gas emissions because of the lost opportunity. They estimated the cap would reduce carbon emissions by 236 megatonnes cumulatively between 2025 and 2040, adding up to a cost of more than $1,000 for each tonne of greenhouse gases avoided by keeping oil worth hundreds of billions in the ground.

Phillips has been downplaying the cost of the climate initiatives — as if the sorry state of Alberta’s economy weren’t obvious enough, with the highest unemployment rate in a generation and global oil companies backing out.

Late Monday, Phillips released a one-page report claiming the climate plan would slow economic growth by a mere 0.05 per cent annually, or approximately 0.4 per cent overall by 2022.

Meanwhile, she said the plan doesn’t take into account the benefits of improved market access and improved economic diversification, as if that will happen just because she says so, and those who are supposed to pay for it would not be deterred by high costs and government volatility.