Oilpatch executives fear “ruthless” move as Trudeau commits to emissions cap for sector

The federal government must work with industry when it looks to draw up an emissions cap for the oil and gas sector, Alberta’s business leaders said Monday, or risk far-reaching consequences for the Canadian economy.

In an interview Monday, Grant Fagerheim, CEO of Calgary-based oil company Whitecap Resources Inc., warned of the dangers of a federal government that he believes sets ambitious climate targets that it does not know how to achieve.

“It’s dangerous to make virtue-signaling commitments without real fixed goals, and it’s ruthless because it’s ultimately about the things we can not live without – food, heat, clothing and transport.”

At COP26, the UN’s climate conference in Scotland on Monday, Prime Minister Justin Trudeau formally committed to a cap on greenhouse gas emissions produced by Canada’s oil and gas industry.

Such a ceiling had been promised in the Liberal Party’s latest election platform with plans to force emissions down until they hit net zero in 2050.

Potential impacts

Lack of rules for the sector has long been a sore point between environmental groups and Ottawa.

The newly appointed Environment Minister Steven Guilbeault, along with Natural Resources Minister Jonathan Wilkinson, on Monday sent a letter to the government’s advisory body asking for its help in developing a policy in support of the new plan.

  • SE | Minister of the Environment discusses ceiling on oil and gas emissions

Minister of the Environment discusses ceiling on oil and gas emissions

Steven Guilbeault, Canada’s Environment Minister, says Canada received international praise for Prime Minister Justin Trudeau’s announcement at the COP26 summit that Canada is setting a ceiling on oil and gas emissions. 0:32

But Fagerheim said the oil and gas industry fears politicians have “massively overestimated” the pace and extent to which the global economy could move away from fossil fuels.

He said the government should sit down to talk to industry leaders about what is realistic.

While the industry has made great strides in recent years in reducing emission intensity (actual emissions from Canada’s oil and gas sector have actually increased over time due to increased production), Fagerheim said it will result in higher prices for Canadian consumers, if the industry is hampered by unattainable goals. .

He added that it will also mean fewer profits for energy companies to go into emission reduction technologies and renewable energy projects.

Adam Legge, chairman of the Business Council of Alberta, said he believes oil and gas companies already understand the need to reduce emissions.

He pointed to the Oil Sands Pathway Alliance, an initiative of Canada’s five largest oil sands producers that is committed to achieving net zero zero greenhouse gas emissions by 2050.

But Legge said factors such as available technology, the cost of implementing this technology and the implications for Canadians in terms of energy availability and price must all be considered before deciding on a specific ceiling.

“If done wrong, it has a number of potential consequences, including a huge amount of lost jobs, lost economic activity – and this is not just Alberta, it’s all of Canada,” Legge said.

‘We must be partners in this’

Alberta already has a 100-megaton provincial legislative ceiling for oil sands emissions, implemented under former NDP Prime Minister Rachel Notley.

United Conservative Prime Minister Jason Kenney told reporters on Monday that his government has proposed this limit as an acceptable number for a federal border, but said so far that the Trudeau government has not been in dialogue with Alberta on the subject.

“The Government of Canada has no chance of achieving its greenhouse gas reduction goals without Alberta’s oil and gas industry,” Kenney said. “We have to be partners in this.”

Kenney said that instead of “throwing big numbers out at international conferences,” the Trudeau government should help companies in Alberta that invest in emission reduction technologies.

“The most important way the Prime Minister could help us would be to put real resources behind a huge expansion of Alberta’s CO2 capture and storage technology,” Kenney said.

The promise falls short, say climate change activists

But climate change activists said Trudeau’s promise on Monday fell short by focusing on emissions from oil and gas production and non-overall production levels.

“[This] “will allow oil and gas companies to keep putting forward false climate program manager at the Norwegian Environmental Protection Agency in a statement.

“We cannot go from climate lagging to even in the middle of the herd without limiting oil and gas production from now on.”

The Canadian Association of Oil Producers warned on Monday that countries lacking affordable and reliable access to energy will be forced to turn to even more carbon-intensive sources, such as coal.

In a statement, CAPP President Tim McMillan said that Canada – under the right political environment – could position itself as a “preferred supplier” of “lower-emission” natural gas and oil.

“It will be incredibly important for the federal government and the natural gas and oil industries to work together to ensure we meet our environmental and social achievements,” McMillan added in an email.

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