A new report commissioned by an industry lobbying group on the federal government’s proposed emissions cap drew strong reactions from both oil and gas supporters and environmental groups on Monday.
The report, produced by S&P Global Commodity Insights, was commissioned by the Canadian Association of Petroleum Producers to examine the impact of several proposed emissions reduction policies on Canada’s conventional (non-tar sands) oil and gas producers.
Its findings on Monday were used to support the industry’s argument that legislating an emissions ceiling will inhibit investment and growth, even as its opponents argued the report’s methodology was flawed.
The commissioned report concludes that if oil and gas drillers were required to reduce greenhouse gas emissions by 40 percent by 2030, the industry could see $75 billion less in capital investments over the course of the year. the next nine years compared to current political conditions.
The study says that would translate to one million barrels of oil equivalent less production per day by 2030 compared to current forecasts, and 51,000 fewer jobs by 2030 than under existing government policies.
The findings align with what Canada’s oil and gas sector has long been saying: that the federal government’s proposed cap on industry emissions will amount to a de facto cap on fossil fuel production.
On Monday, CAPP President Lisa Baiton said the new report is evidence that a federally mandated emissions cap “should not apply.”
“Decreases in production imposed on industry by a strict emissions cap will result in significant job losses for Canadians, serious impacts on the economy and our GDP, and have the potential to compromise Canada’s energy security and prosperity.” Baiton said.
But the federal government has said all along that the oil and gas emissions cap will be designed to limit emissions, not oil and gas production.
The government has said the design of the emissions cap will take into account other regulations, such as Canada’s commitment to reduce methane emissions from oil and gas by at least 75 per cent by 2030, as well as complementary climate policies from governments. federal and provincial.
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And the hypothetical scenarios examined in the report commissioned by CAPP do not use the same targets that the federal government actually proposes in its draft emissions framework, released last December.
Under the proposed framework, the sector would have to reduce greenhouse gas emissions by 35 to 38 percent from 2019 levels by 2030.
The sector would also have the option of purchasing offset credits or contributing to a decarbonization fund that would reduce that requirement to a cut of just between 20 and 23 percent.
“The CAPP has commissioned an analysis of a non-existent scenario. Everything in it arises from false assumptions that make it so deeply flawed that it amounts to misinformation,” Oliver Anderson, a spokesman for Environment Minister Steven Guilbeault, said in an email.
CAPP says its sponsored study adds the projected impact of the federal government’s draft methane regulations, which would require at least a 75 percent reduction of oil and gas methane emissions below 2012 levels by 2030, and Please note that the policies have not been finalized and remain uncertain.
Environmental groups were quick to criticize the report’s methodology. Clean energy think tank The Pembina Institute said the CAPP report includes only conventional oil and gas drillers and leaves out tar sands production, which accounts for the vast majority of the industry’s emissions profile.
The Pembina Institute added that when it comes to methane, which is where most emissions from conventional drillers come from, significant reductions can be achieved using existing cost-effective technologies.
“Research from the Pembina Institute demonstrates that the oil and gas industry can feasibly meet the proposed 2030 emissions cap, almost entirely through a combination of methane reductions (which would come primarily from the conventional sector) and the plan Pathways Alliance’s 2030 emissions reduction targets (for example). tar sands),” the think tank said in a statement.
While the oil and gas sector is Canada’s highest-emitting industry, the majority of those emissions come from the tar sands sector, where increased production is contributing to increased total emissions.
Emissions from the conventional sector, which the CAPP report focuses on, have been declining since 2014.
Alberta Premier Danielle Smith also weighed in Monday, issuing a joint statement with the province’s environment and energy ministers in which she called the proposed cap a “reckless gamble that will devastate Canadian families and not will do nothing to reduce global emissions.”
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