Alberta is set to unveil the blueprint for its 100-megatonne cap on greenhouse gas emissions from the province’s oil sands, including a plan for specific project emission permits and penalties if producers do not meet their allocations.JASON FRANSON/The Canadian Press
Alberta is set to unveil the blueprint for its 100-megatonne cap on greenhouse gas emissions from the province's oil sands, including a plan for specific project emission permits and penalties if producers do not meet their allocations.
The recommendations from the Oil Sands Advisory Group, not yet adopted by the government, are set to be released by the province in Calgary on Friday – with consultation with communities, industry and other groups to take place in the months ahead.
Right now, the oil sands industry – the fastest-growing source of Canadian GHG emissions – collectively emits about 70 megatonnes a year. Under the advisory group's plan, the Alberta Energy Regulator would issue annual emission-allocation permits to companies for oil sands projects or facilities, according to sources familiar with the advice to government.
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To slow the growth of emissions as new projects or expansions are proposed, the permitting system will become more competitive once the industry as a whole gets closer to the 100-megatonne-a-year cap. Permits would be issued based on past performance on lowering emissions.
The advisory group – made up of industry, environmental and Indigenous members – has made recommendations for financial penalties if producers surpass emission targets. The group has also called for a change to a regulation known as Directive 82, so that the highest-cost, highest-emission bitumen would be left in the ground.
The 100-megatonne cap was the central plank in a climate strategy introduced by the province in 2015 to blunt criticism of fast-growing carbon emissions in the oil sands.
The system laid out by the advisory group is designed to make sure emissions limits are never exceeded but to maintain investor confidence in the province – and to make sure the cap encourages technological innovations to limit emissions.
Alberta is the world's first major oil-producing jurisdiction to cap emissions, but the plan still allows emissions to grow in the decades ahead. While companies have made strides in lowering the amount of energy it takes to produce a single barrel of oil, overall emissions are poised to soar as production levels rise.
Alberta Premier Rachel Notley's government is taking flak from many sides as the climate strategy has raised hackles from an energy industry that is already struggling with depressed oil and natural gas prices, and predictions of limited capital spending or growth beyond the near-term completion of large-scale projects. On the other side, environmentalists believe the province's actions won't be enough for Canada to meet its international climate-change commitments, including the Paris agreement.
The industry's carbon footprint has been a major flashpoint as companies seek public support for new pipelines, including Kinder Morgan Inc.'s $7.4-billion Trans Mountain expansion through British Columbia to the Pacific coast.
The plan to nearly triple capacity on the existing line to 890,000 barrels a day was approved by Prime Minister Justin Trudeau last year. But BC NDP Leader John Horgan and Green Party Leader Andrew Weaver, who are poised to assume power in the province, have pledged to block it.
The 18-member Oil Sands Advisory Group was created last year to provide advice on how best to implement the 100-megatonne cap.
The disparate group includes co-chairs David Collyer, former head of the Canadian Association of Petroleum Producers, Tzeporah Berman, an environmental campaigner formerly with Greenpeace and ForestEthics, and Melody Lepine, director of government and industry relations for the Mikisew Cree First Nation.
Companies represented included Royal Dutch Shell, Canadian Natural Resources Ltd., Cenovus Energy Inc. and Suncor Energy Inc. – whose top executives unveiled the emissions cap alongside Ms. Notley at a news conference in late 2015.
The province sought recommendations on a range of potential mechanisms for implementing the policy, including whether changes were required on existing regulations or the permitting process for new developments, according to a mandate letter posted on the government's website.
Ms. Notley has maintained the differences in opinion have helped in the consensus-building process, and will lead to stronger oil sands policy. Earlier this week, the Alberta Premier told reporters that the idea of leaving some bitumen in the ground was something that could only happen far in the future.
"At a certain point becomes an issue of pace – potentially it could," she said of oil sands development this week.