Canada’s oilpatch cheers climate change agreement
North American pact will help level the playing field across sector
Domestic oil and gas companies are not worried about a new, North America-wide energy and climate change strategy that contains aggressive emissions reduction targets.
Prime Minister Justin Trudeau, U.S. President Barack Obama and Mexican President Enrique Pena Nieto committed to chopping methane gas emissions from the oil and gas industry by 40 to 45 per cent as part of a wide-ranging North American Climate, Clean Energy and Environment Partnership, announced Wednesday.
The deal brings Mexico into line with methane reduction targets Canada and the U.S. agreed to in March. Pena Nieto said during a press conference that “isolated national efforts are insufficient” to tackle issues like environmental protection and climate change.
The agreement also makes commitments to increase the use of “clean energy” for power across North America — which Obama said was a “bold goal but an emi- nently achievable goal.”
Canadian Association of Petroleum Producers president and CEO Tim McMillan said the announcement would have a positive effect on the domestic energy industry because Canadian producers are already under pressure to reduce methane emissions and pay carbon levies. “Having our competitors held to a similar standard is going to be good for all of us,” he said.
“Levelling the playing field as we are competing for markets, I think we view that as an important step forward,” he said.
McMillan said he was not worried about another provision in the agreement, which could lead governments across North America to encourage the purchase of electric cars over gasoline- or diesel-burning vehicles.
He said that demand for oil is growing globally and Canadian oil companies are focused on capturing more of the global market.
Similarly, Canadian Association of Oilwell Drilling Contractors president Mark Scholz said, “the fact that Mexico is entering into this, is good for the North American oil and gas industry.”
“When you look at specific reductions like this you want to make sure that all jurisdictions are participating in a fair way that doesn’t put one country, one jurisdiction, at a disadvantage,” he said.
The agreement was also widely praised by environmentalists, including from Environmental Defence, which called the deal a demonstration of “great leadership in the global fight against climate change.”
“It’s absolutely a step in the right direction,” Pembina Institute federal policy director Erin Flanagan said.
Right now, she said, 37 per cent of total electricity production in North America is from “clean” sources, including renewables and nuclear.
The commitment announced Wednesday would force Canada, the U.S. and Mexico to each add renewables, nuclear projects or carbon capture and storage projects on coal-fired power plants that would bring that figure up to 50 per cent.
Flanagan noted however, that much of the burden for changing the energy mix would fall on the U.S. and Mexico. She said 81 per cent of Canada’s total electricity production would be considered clean by the standards agreed to in Wednesday’s deal, compared with 33 per cent of U.S. electric generation and 18 per cent of Mexican electricity.
“We have responded directly and decisively to the challenge of climate change,” Trudeau said.
Canadian Electricity Association president and CEO Sergio Marchi said in a release that he welcomed the goal of reaching 50 per cent clean power generation by 2025 and collaborating on more crossborder transmission projects.
When you look at specific reductions ... you want to make sure that all jurisdictions are participating in a fair way.