GLOOMY INTERNAL REPORT,
Internal analysis on carbon tax, methane rules out of date: NDP
CALGARY Alberta’s carbon tax and methane emission rules could cost the oil and gas sector billions of dollars in the coming years, potentially eroding industry competitiveness, according to a leaked government report obtained by the official Opposition.
But the Notley government calls the information inaccurate or outdated, and insists it doesn’t account for new provincial carbon policies — to be released Wednesday — that will mitigate the impact on all large Alberta industries.
The two-page internal analysis reveals concern within government that two central elements of its climate change agenda — along with a plan to protect caribou — “are expected to have material cumulative impacts on the competitiveness of oil and gas facilities in Alberta.”
The undated note cites analysis by the Alberta Energy Regulator that estimates regulations under development designed to lower methane emissions could cost the oil and gas industry $1.5 billion over seven years.
The report also states a separate analysis by Alberta Finance shows the methane policy could scrap 1,000 jobs across the province.
The government rejects both estimates.
The briefing note also puts a steep price tag on the province’s plans to impose its carbon tax on large industrial greenhouse gas emitters.
This system of credits, formally called output-based allocations, could cost the energy sector $1.3 billion a year, beginning in 2018, the document states.
However, government officials said Tuesday total costs for all industries will fall well short of that level.
United Conservative Party MLA Don MacIntyre said the changes would deliver another hit to the Alberta oilpatch as it faces ongoing competitiveness pressures.
“Don’t treat environmental standards as a cash cow, and that’s what this government is doing,” MacIntyre said. “This is simply another hammer blow, (on) a series of hammer blows.”
The NDP government says the data ignores several key policy measures the province has been working on with industry for months to phase-in the new emissions rules, provide investment to spur innovation by companies, and to protect trade-exposed industries.
Government officials peg the total compliance cost to all industrial sectors from the output-based allocation system at $874 million in 2018-19, rising to almost $1.2 billion two years later.
Environment Minister Shannon Phillips said she hadn’t seen the leaked note, but said the data is “quite outdated and contains inaccurate information.”
She insisted there will be no job losses tied to the carbon-pricing plan, and noted the methane policy is still under development.
The information “may have at some low level (been) circulated, but it did not form part of the analysis” of the broader program to be announced Wednesday, she said.
The report appears to have been completed earlier this year, as it notes a series of international companies sold off their oilsands assets to domestic producers — events that unfolded in the spring.