Colleen Collins, Vice President, Canada West Foundation | Speaking Notes
Monday February 7, 2022

Thank you for inviting the Canada West Foundation to meet with you today.  I appreciate the opportunity, and I also want to thank you for taking the time to address the matter of an emission cap for the entire oil and gas sector.

The policy’s purpose is to achieve emissions reductions – The Canada West Foundation certainly does not disagree with that purpose.

We also recognize there are many pathways to get there – there is no silver bullet – it will take carbon capture, energy efficiency, process improvements, fuel switching, electrification, renewables, nuclear, hydro, and new technologies on the horizon.

There are also many policy tools — carbon pricing can’t do it all.  We already have a complex mix of carbon pricing, methane regulations, fuel standards, emission standards, incentives for innovation, investments in new technologies like carbon capture and then there are emission caps.

As one of the big emitters, emission reductions from oil and gas sector is a big part of the solution.

A 2020 Canada West Foundation report found that 43% of all emissions regulations in place across the country at that time specifically addressed the oil and gas sector – and the number increases to 65% if you look at large emitters.

You may be aware that Alberta already has an emissions cap for oil sands.

A 100 megatonne (MT) cap was introduced in 2015 as part of its Climate Leadership Plan – The Oil Sands Emissions Limit Act remains in place despite other changes to climate policy since that time. Since then, other provinces have enacted targets or caps on total emissions.

So before extending this tool across the entire oil and gas sector – across several provincial jurisdictions,  I would like to bring three points to the committee’s attention as it considers whether there are sufficient expected benefits from this proposed policy to compensate for the expected additional costs to producers and the economies of producing provinces and the rest of Canada?

The Ab cap works because:

  1. There is room for growth under the cap and it supports economic growth and innovation to reduce emissions – so environment AND economy are considered.
  2. It’s one thing to regulate 35 oil sands sites with 6 producers – it’s another to regulate 200,000 sites across different provincial jurisdictions. And
  3. This additional regulation will create even more complexity, uncertainty and federal-provincial wrangling – The SCC decision on the GGPA was narrow – this proposal is very broad – There will be federal provincial battles over the cap, over measurement and validity of the policy itself. None of which is good for investment required in new technologies to reduce emissions or for the economy. Uncertainty is the reason Teck declined to proceed with the Frontier oil sands mine in 2020. Uncertainty is the reason Canada has one LNG export facility (and it’s still under construction – while Australia has 16, the US has 7 and the rest of the world 70)

The benefits lie primarily in their symbolic value – Canada and its province are already recognized leaders in emissions reduction policy. One has to ask what is the value of additional legislation that creates more uncertainty and distracts from the business of implementing existing policy.

I would be happy to take questions on these points or others you may have.