Car bon Price
A federally imposed carbon price—whether it’s Trudeau’s or that of a future government—could also favor the economics of investing in an upgrader to refine Canadian oil at home. A carbon tax could be levied against ocean-transport emissions, either at Canadian ports or their foreign points of origin. If Canadian carbon pricing also waived the transport tax for crudes such as Alberta’s that had already paid a carbon levy, it would hike the cost of feedstock from countries such as Nigeria that have massive pollution profiles. Such solutions are still very much up in the air as the details of Canada’s carbon plan develop.
Currently, the only Canadian crude oil that pays a carbon price is Alberta’s, and the provincial NDP government is committed to raising those costs. In addition, Ottawa will soon impose a carbon price that will reach $50 per ton by 2022—a cost that might not be applied to imported crudes at all or to the same degree. Furthermore, upgraders are big carbon emitters and mitigating options such as carbon capture and storage are expensive. Importing oil from countries that have no carbon pricing policies—and whose oil producers fly under the radar of Canadian environmental protesters—is still good for the refiner’s bottom line.