Sources say that Canada could drop its oil emission cap as part of a new climate plan
Three sources familiar with the discussions said that the Canadian government was in talks with Alberta and energy companies about removing a federal cap for emissions in the oil and gas industry if both the province and the industry reduced their carbon footprints in other ways.
Sources who weren't authorized to publicly discuss the discussions said that the government of Prime Minister Mark Carney has discussed the removal of the cap with the oil companies, and Canada's leading oil producing province, if they made other environmental concessions.
Canada's emission cap has yet to be implemented by legislation. Canadian oil and natural gas companies have criticized the idea of it, saying that it would force them to reduce production.
Carney, who was elected in April on a promise to protect Canada's economic interests from U.S. Tariffs, has been criticized for moving away from the environmental focus of his Liberal Party.
Sources said that the tone of his government has changed dramatically from just a few short weeks ago. They added that officials had, until recently, suggested that the cap on emissions would remain in place.
Carney stated during his election campaign that he would maintain the emission cap, which will not take effect before 2030. Justin Trudeau, his predecessor, published a draft regulation for the cap in November last year.
Sources said that the current discussions could lead to the scrapping of the emissions cap as part a new, broader "climate competitiveness" strategy which the federal Government aims to reveal later this fall.
Carney's Office referred to the Federal Environment Department, which stated that the government was reviewing feedback regarding the emission cap.
A spokesperson for the Environment Department said that while mechanisms such as caps can help build a future where emissions are reduced, "we won't get there by regulation alone."
The statement read: "Canada's New Government is Committed to Climate Policy that is Unifying, Credible, and Predictable; that Reduces Emissions, Drives Investment, and Builds the Economy of the Future."
Canada's Natural Resource Minister Tim Hodgson refused to disclose details of the negotiations but stated in an interview with the media on Thursday that the federal government was committed to providing clean and conventional energy while being environmentally responsible.
Hodgson: "What I can say is that the government is focused on outcomes, not how to get there."
Two sources stated that any move to remove the cap would depend on Alberta and its oil sector renewing their commitment to emissions reduction, including but not limited, moving forward with the Pathways Carbon Capture and Storage project.
Carney, speaking at an Edmonton meeting of the ruling Liberal Party this week, said that Canada's new strategy for climate competitiveness will be based on "results rather than objectives and investment over prohibition".
The oil and gas industry is the most polluting in Canada. Its emissions are increasing due to increased production of crude oil and natural gas in Canada's Oil Sands region.
Ottawa is unlikely to meet its international climate commitments to reduce greenhouse gas emissions by 40 to 45% from 2005 levels by the year 2030, unless oil and gas sectors intensify their efforts to decarbonize.
The cap would force the oil and gas industry to reduce emissions by 37%, or 137 million tons, below the levels of 2022, by 2030. Carney pledged to make Canada "the world's leading superpower in energy", advancing clean energy development and making the conventional oil-and-gas sector more competitive.
He also sought to repair the federal relationship with Alberta that had been strained under Trudeau due to its heavy focus on environmental concerns. (Reporting from Amanda Stephenson, Calgary; Additional reporting by David Ljunggren, Ottawa; Editing done by Caroline Stauffer and Margueritachoy, Richard Chang, and Lincoln Feast.
(source: Reuters)