OILSANDS FIRMS PUT ON NOTICE
Advisory group calls for penalties if industry nears emissions cap
CALGARY Oilsands producers could face steep fines and suspended projects if industry comes close to hitting a mandated 100-megatonne limit under recommendations proposed by Alberta’s Oil Sands Advisory Group.
But the non-binding report released Friday sets out a series of policy options to help avoid reaching that point, including requiring the use of better technology, setting emissions management plans and costs, and improved regulations.
Advisory group co-chair Dave Collyer said the increased emissions reporting and forecasting in the near-term will help achieve the lower emissions-intensity goal.
“That transparency and awareness, in fact, does drive behavioural change,” Collyer said. “So there’s a whole suite of recommendations that I characterize as more in the carrot category, to try and create the right environment to drive the behaviours.”
The penalties for industry would only kick in when industry looks to be within a year of hitting the cap. The penalties could include forcing those with higher-than-average emissions intensity to reduce them or face fines proposed at $200 a tonne of carbon. The government could also suspend projects that haven’t started construction.
Collyer said while the plan could hit higher emitters, it’s just part of where global expectations on climate action are headed.
“People have to accept that in the world we’re likely to be in, carbon intensity matters. And if you’re on the wrong part of the carbon curve, you’re going to be disadvantaged”
Wildrose Leader Brian Jean said in a statement that giving the government authority to suspend projects would further chill investment in the oil and gas sector, and is a clear cap on economic growth.
Collyer said when the cap might be reached is much debated, but there is a general sense that under business the oilsands would hit the cap by about 2030, or somewhere around four million barrels a day.
The oilsands industry emits about 70 megatonnes of greenhouse gases, but based on exceptions to the cap the number is closer to 60 megatonnes, Collyer said.
Those exemptions include the electricity portion of co-generation, as well as experimental and enhanced recovery operations. Upgraders that started after 2015 will be subject to a separate 10 megatonne cap.
To better understand how the industry is performing, the advisory group recommended establishing annual and 10-year forecasts on emissions.
It also suggested reviews on the system and how facilities might be affected as the oilsands hits 80, 90 and 95 megatonnes.
Alberta Environment Minister Shannon Phillips said the recommended measures, combined with the carbon price, look to provide enough near-term incentives — and the government is not considering adding more.
Phillips said the government will review the recommendations and begin stakeholder consultations, with an aim to have the regulations implemented by early 2018.