Canada's announcement of an emissions cap on its wealth-generating oil and gas sector is receiving significant criticism from leaders nationwide. Layered onto many other emission-reducing regulations, the general consensus is that the cap will:
- Reduce Canadian oil and natural gas production for compliance
- Make Canadian energy less competitive and drive investment away
- Cede Canada's market share to less responsible producers abroad
- Block Indigenous communities from economic reconciliatory opportunities
- Make life less affordable for Canadians by reducing our purchasing power
- Be worse off for the global environment by increasing emissions, not reducing them
But don't take our word for it.
Below, Canada's top leaders and organizations share their thoughts on the oil and natural gas emissions cap and why it is an unnecessary policy for several important reasons. Also see:
- 20 Quotes Showing the Importance of Energy Security for Canadians & the World
- Canada Has Important Role to Play in Global Energy Security: POLL
- A Cap on Canadian Oil & Gas is a Cap on Energy Security
- A Cap on Canadian Oil & Gas is a Cap on Economic Prosperity
20 Quotes on Canada's Oil & Gas Emissions Cap
The emissions cap targets Canada's upstream oil and gas sector, which is already impacted by federal carbon pricing, increasingly stringent federal methane regulations, and the federal Clean Fuel Regulations and Clean Electricity Regulations.
Saskatchewan has taken significant steps in recent years to reduce emissions. This includes reducing methane emissions by 64 per cent since 2015, installing the first operational carbon capture and storage system in the world at Boundary Dam Power Station in 2014, and investing billions of dollars in renewable energy sources such as solar, wind, biomass, and natural gas generation.
These new federal policies will have serious economic impacts on Canadians and limit our sustainable Canadian energy products from providing heat and electricity to the world.
Scott Moe - Premier of Saskatchewan [13]
------
Every barrel of oil that won't be produced due to Ottawa's emissions cap is one more barrel Venezuela, Iran or Russia will be happy to sell. Capping oil and gas emissions will do little for the environment, but will cost us dearly in jobs and tax revenue.
Montreal Economic Institute [1]
------
A step backwards for climate policy.
The cap is a wedge issue, not an efficient means of lowering GHGs, and further erodes carbon pricing. It is a complex way to levy a higher price on a single sector, while still allowing Quebec to lag behind others.
Trevor Tombe – Professor of Economics, Research Fellow, The School of Public Policy, University of Calgary [2]
------
I estimate that a 10 percent hit to productivity in the oil and gas extraction sector shrinks Canada's economy by approximately 1.2 percent. That's equivalent to roughly $35 billion per year, or nearly $900 per person per year.
Much of the decline is in Alberta and Saskatchewan, of course. But I estimate over 40 percent of the economic costs are borne by other provinces—and nearly one-quarter by Ontario alone. In fact, every single province is negatively affected. A 10 percent productivity hit to oil and gas, for example, lowers Ontario's overall productivity by over 0.6 percent and shrinks the Atlantic provinces by roughly 0.5 percent.
Trevor Tombe – Professor of Economics, Research Fellow, The School of Public Policy, University of Calgary [3]
-----
Each time Ottawa forces the Canadian energy sector to contract, it is foreign producers who win. Ottawa does not have the means to affect global demand, so reducing local supply will only end up exporting jobs and tax revenues.
Gabriel Giguère – Public Policy Analyst, Montreal Economic Institute [4]
It's disheartening. Disheartening because what these projects mean to Indigenous People in Canada. For far too long we've been left out of the equation, we've been left out of every bit of consultation and accommodation. And now that we've been finally have a seat at the table, we are being shoved aside again, which is not good for Canada.
We just started our projects in Canada, the equity ownership, it all sounds all well and good and promising. But it still hits the Indigenous People of Canada hard, because there are nations that have signed on that are expecting economic prosperity while at the same time maintaining high environmental standards. So we need to have further discussions for what this means to the Indigenous People of Canada.
Karen Ogen – CEO, First Nations LNG Alliance [9]
------
Pursuing a sector-specific emissions policy would come at a high cost, further eroding the basis of Canada's carbon regime and creating undue harm to the economy and the purchasing power of Canadians.
Goldy Hyder – President & CEO, Business Council of Canada [16]
------
Treating oil and gas sectors emissions as if they're different than emissions produced by the cement industry, the steel industry, or any other industry, it seems to be a weak policy rationale to move forward on developing a complex system for one sector when you've already got a system in place that seems to be working reasonably well.
Michael Gullo – Vice President, Business Council of Canada [5]
------
Climate change is the challenge of our time, however a cap on emissions does not achieve the outcomes the federal government is looking for. The emissions cap, as currently structured, will create more uncertainty and stifle investments aimed at decarbonization in a sector that has already shown significant decreases in emissions intensity, and risks moving investments to other jurisdictions – ultimately leaving Canada further behind.
Deborah Yedlin – President & CEO, Calgary Chamber of Commerce [6]
------
Energy and the environment go hand-in-hand, and addressing climate change has been – and will continue to be – an economic opportunity that can support Canada's long-term prosperity. However, the emissions cap announced by the federal government today, replete with unrealistic timeframes and an additional regulatory structure creates greater uncertainty that will strand investment, not attract it.
Calgary Chamber of Commerce [6]
Imposing an emissions cap on Canada's oil and gas producers, who are already achieving significant emissions reductions as shown in the Federal government's own data, is unnecessary and unacceptable. A federal emissions cap also introduces further uncertainty, including likely constitutional challenges.
To ensure Canadian producers can continue to responsibly produce the affordable and reliable energy that the world needs, while continuing to advance clean technology projects, our sector must compete for investment – this requires balance, pragmatism, and incentives instead of punitive measures like an emissions cap that further damage Canada's reputation as a place where projects are far too expensive, goalposts are uncertain, and environmental performance is not recognized.
Instead of promoting harmful measures that shift production to other jurisdictions – which will increase energy costs for Canadians – Canada should be focused on implementing incentives that are comparable to programs being offered elsewhere in the world. Government should be finalizing previously announced incentives, such as implementing a CCUS investment tax credit, and a workable program for carbon contracts for difference that provides carbon price certainty and supports multi-million dollar, multi-decade projects.
Explorers and Producers Association of Canada [7]
------
"We strongly oppose an emissions cap and it is unnecessary to meet Canada's Paris commitments. It is simply a punitive approach, not in line with other countries."
Tristan Goodman - President, Explorers and Producers Association of Canada [14]
------
It will put thousands of Albertans out of work, and a cap on production is nothing short of the NEP (National Energy Program) all over again. It's the single-biggest existential threat (to the sector). An emissions cap is a cap on production. It's as simple as that.
Bob Geddes - President, Ensign Energy Services [14]
------
A pathway to self-determination is being achieved through the ownership of oil and gas projects and involvement in the sector. This would result in a cap on Indigenous opportunity in the oil and gas sector.
John Desjarlais – Executive Director, Indigenous Resource Network [8]
------
Despite the federal government's stated objective that the emission cap should not put a limit on Canadian oil and natural gas production, the unintended consequences of the draft framework announced today of a cap-and-trade system with an interim target of a 35% to 38% emissions reductions below 2019 by 2030 could result in significant curtailments – making this draft framework effectively a cap on production. At a time when the country's citizens are experiencing a substantial affordability crisis, coincident with record budget deficits, the federal government risks curtailing the energy Canadians rely on, along with jobs and government revenues the energy sector contributes to Canada.
An emissions cap on the upstream oil and natural gas industry is unnecessary, given the longstanding carbon policies which already have Canada well on its way to meet or exceed emission targets. The added complexity of yet another layer of carbon policy is potentially detrimental to established carbon markets that fund clean energy projects. Canada is a major exporter of hydrocarbons to its western allies who value our commitment to energy security while operating under one of the most stringent environmental regulatory regimes in the world.
Lisa Baiton – President & CEO, Canadian Association of Petroleum Producers [10]
We're concerned about the Government's decision to pursue an Oil and Gas Emissions Cap without adequately considering industry concerns. The proposed emissions cap will make Canada uncompetitive in the fight for the global capital that actually encourages investment in net-zero technologies, some of which do not yet exist at scale in the market. We shouldn't be the jurisdiction with the least attractive fiscal policies for decarbonization.
We need a strategy that balances our decarbonization plan with economic growth, and we'll only get that through collaboration between the government, provincial authorities, and industry. Canada's net-zero ambition won't be possible without the private sector investing in decarbonization and the broader energy transition.
If we truly want to scale up decarbonization initiatives, reduce emissions, create jobs and support Indigenous economic reconciliation, our fiscal policies need to reflect the realities of the energy transition and the need for a robust economy.
Bryan N. Detchou - Senior Director, Natural Resources, Environment and Sustainability, Canadian Chamber of Commerce [11]
------
It's not an emissions cap, it is a production cap. The government is piling on to make energy less affordable. It's a sad day for Canadians because people don't want to invest in our country when they read those rules or regulations. So it's self-fulfilling that energy costs go up.
We've had increased carbon taxes, new methane regulations, new clean electricity regulations and so we have what's called a piling on or a pancake of new regulations. And I start from a position that Canada has one of the best records with respect to emission reductions.
Jeff Tonken - Chief Executive Officer, Birchcliff Energy [15]
------
Canada's plan to institute a hard cap on greenhouse gas emissions from the oil and gas sector is deeply problematic.
First, given the limitations of technology, achieving greenhouse gas reductions from the oil and gas sector in Canada is likely to be achieved primarily by curtailing production of oil and gas in Canada, with all of the negative economic and social impacts such reduction has had in the past, when natural fluctuations in world markets for oil and gas led to reduced production, export, and sale of Canadian oil and gas. Inflicting such pain on Canada's economy voluntarily would seem to fall into the category of "shooting oneself in the foot."
Second, the amount of emission reductions to be achieved by Canada's greenhouse gas emission caps is insignificant on the global scale of greenhouse gas concentrations, which are the only thing that matters when it comes to potentially limiting climate change, and the environmental impacts that we fear from it. Third, capping Canada's greenhouse gas emissions of the oil and gas sector will have impacts that transcend just that sector, harming Canada's nascent and growing petrochemical and plastics manufacturing sectors, which are located across Canada in Alberta, Ontario, and Quebec.
Finally, there is the reality that anything which Canada does unilaterally to stem greenhouse gas emissions domestically is likely to be at least partially offset by the "leakage" of greenhouse generating activities to other jurisdictions around the world, that may in fact have far worse environmental, health, and safety regulatory regimes than does Canada.
Kenneth P. Green - Senior Fellow, Fraser Institute [12]
------
When we are the only producing country in the world doing this [emissions cap], perhaps we should pause for a moment and ask "why is that?"
Eric Nuttall – Partner & Senior Portfolio Manager, Ninepoint Partners [17]
Does Canada Need the Oil & Gas Emissions Cap?
How does limiting Canadian oil and gas production through an emissions cap:
- Support Canada's economic prosperity?
- Support local and Indigenous jobs?
- Reduce global energy demand?
- Attract investment capital?
- Help our allies asking for our energy exports?
- Reduce global emissions?
- Make life more affordable for Canadians?
- Make the world a better place?
Capping oil local oil and gas production emissions is unnecessary, unaffordable, and unattainable. Other producers benefit, global emissions increase and Canadian and Indigenous families suffer.
Let's return to a balanced conversation where Canada can continue to be the responsible, reliable energy supplier the world needs while simultaneously reducing emissions. Our proven track record shows we don't have to choose between economic prosperity and environmental protection.
With growing global demand for years to come, a cap on Canada's responsible oil and natural gas supply just doesn't make any sense whichever way you put it.
The world needs Canada's responsibly produced #oil and #NaturalGas. pic.twitter.com/OH6omij2cR
— Canada Action (@CanadaAction) December 24, 2023
SOURCES:
1 - https://twitter.com/iedm_montreal/status/1732801712790851894?s=12&t=Act9QPUigWotLffoxqV2cA
2 - https://twitter.com/trevortombe/status/1732795750302830876?s=12&t=Act9QPUigWotLffoxqV2cA
3 - https://thehub.ca/2023-12-14/trevor-tombe-careful-an-oil-and-gas-emissions-cap-wont-just-hurt-alberta/
4 - https://www.iedm.org/capping-the-energy-sectors-emissions-would-deprive-canada-of-over-6-0-billion-a-year/
5 - https://thebusinesscouncil.ca/publication/missions-cap-weakens-canadas-climate-policy-system/
6 - https://calgarychamber.com/release-calgary-chamber-disappointed-by-emissions-cap
7 - https://www.newswire.ca/news-releases/explorers-and-producers-association-of-canada-opposes-emissions-cap-on-responsible-canadian-oil-and-gas-producers-803459882.html
8 - https://www.canadianenergycentre.ca/business-leaders-blast-ottawas-unnecessary-and-unacceptable-oil-and-gas-emissions-cap/
9 - https://twitter.com/ESF_Canada/status/1733062193258934285
10 - https://www.capp.ca/news-releases/statement-from-the-canadian-association-of-petroleum-producers-capp-on-the-federal-government-emissions-cap-framework/
11 - https://chamber.ca/news/statement-regarding-the-federal-governments-announcement-of-the-oil-and-gas-cap-framework/
12 - https://www.fraserinstitute.org/sites/default/files/canadas-ghg-cap-imposed-on-oil-and-gas-industry-is-all-pain-with-no-gain.pdf
13 - https://twitter.com/PremierScottMoe?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
14 - https://calgaryherald.com/opinion/columnists/varcoe-oilpatch-ottawa-new-cap-trade-emissions-plan
15 - https://calgary.ctvnews.ca/cap-on-greenhouse-gas-emissions-singles-out-alberta-premier-smith-says-1.6677660
16 - https://thebusinesscouncil.ca/publication/rethinking-an-oil-and-gas-cap/
17 - https://twitter.com/ericnuttall/status/1733171022176596452