Alberta warns against infringing on provincial rights, producer group worried investment will be chased away.

By Dale Lunan

Early reactions to the Canadian government’s plans announced July 18 to examine two options for capping oil and gas sector greenhouse gas emissions have not been entirely positive.

Hours after federal environment minister Steven Guilbeault said either a sector-specific cap-and-trade system would be developed to control emissions or carbon prices boosted to encourage reductions, Alberta again warned against any federal moves that might impinge on the provinces’ rights under the Canadian Constitution to control oil and gas production.

“The federal government cannot act unilaterally to meet their emissions targets,” Alberta energy minister Sonya Savage and environment minister Whitney Issik said in a joint statement. “Alberta will not accept any plan from the federal government that seeks to interfere in our constitutionally protected ability to develop our resources.”

In May, Alberta’s Court of Appeal ruled that the federal Impact Assessment Act, which lays out rules for developing major infrastructure projects – including in the oil and gas sector – raises an issue of fundamental fairness in how projects are pursued.

“The justices determined that the federal government has taken a wrecking ball to the constitutional right of Albertans and other provinces to have their natural resources developed for their benefit,” Savage and Issik said.

Ottawa’s two options for reducing emissions, they said, is yet another example of how the federal government wants to impose rules that will ultimately throttle the oil and gas sector in Canada – the largest contributor to the country’s economy and one of its largest employers.

“This discussion paper is yet another example of a lesson Ottawa refuses to learn: the only way to actually cut emissions and keep life affordable is to work with the provinces to create environmental policies that will actually work,” they said.

Alberta is more than willing to discuss “meaningful and productive” ways to address GHG emissions, the two ministers said, but so far it hasn’t been given that chance.

“Less than two weeks ago, energy ministers from the federal government, provinces and territories gathered together, yet Ottawa did not seek our input or share this paper.”

Meanwhile, the new head of the Canadian Association of Petroleum Producers (CAPP), which represents more than 80% of Canada’s oil and gas production, warned Ottawa’s discussion paper includes proposals that would work against progress already made to achieve Canada’s climate goals and contribute to global energy security.

“As presented, both emissions cap options have the potential to limit oil and natural gas production in Canada by adding regulatory burden and eliminating options for economy-wide cooperation on emissions reductions,” CAPP CEO Lisa Baiton said in a statement emailed to Gas Pathways. “Imposing an emissions cap solely on Canada’s oil and natural gas sector, as the paper proposes, will likely drive energy investment into other countries who may not share our high environmental and human rights standards. As our allies and trading partners are grappling with an energy crisis, now more than ever Canada needs to strive to create the right environment to attract investment.”