Canada’s promised oil and gas emissions cap framework could be released at any moment, according to the federal government. Environment Minister Steven Guilbeault, who is currently attending the United Nations Climate Change Conference in Dubai, expressed his expectation that the framework would be presented at the end of the conference. Prime Minister Justin Trudeau had previously confirmed the Liberal government’s plan to impose a limit on emissions from the oil and gas sector during a previous climate summit.
However, recent legal setbacks have caused delays in the development of the framework. Guilbeault cited the Supreme Court ruling on impact assessment and the Federal Court decision on plastics as factors that require careful consideration to ensure pollution is tackled without infringing on provincial jurisdiction.
The need for an emissions cap in the oil and gas sector has been emphasized by independent forecasts and Ottawa’s own emissions modeling, both of which show that Canada is not on track to achieve its emissions reduction targets. While emissions cuts have been achieved in the electricity sector, the oil and gas industry has seen an increase in emissions alongside production growth.
According to the Canadian Climate Institute, implementing an emissions cap alone will not be sufficient to meet the country’s climate targets. However, combining the cap with strengthened methane regulations could help Canada achieve its 2030 goal of reducing greenhouse gas emissions by at least 40% below 2005 levels.
In October, Canada committed to accelerating its methane reduction plan for the oil and gas sector to achieve a cut of least 75% below 2012 levels. Anna Kanduth, one of the directors at the Canadian Climate Institute, highlighted the critical role of reducing emissions from the oil and gas industry in reaching the country’s climate targets. She suggested that combining the emissions cap with stricter methane regulations could be an effective strategy.
Minister Guilbeault hinted at the possibility of releasing strengthened methane regulations during the United Nations conference in Dubai. He also mentioned that Canada is collaborating with Washington on this issue. Methane is a potent greenhouse gas, and eliminating its emissions from landfills and oil and gas operations is crucial to limit global warming to the benchmark set by the Paris Agreement.
The Pathways Alliance, representing the six largest oilsands companies, acknowledged the need for a cap on sectoral emissions. However, they raised concerns about the possible restrictiveness of the cap and its impact on industry growth. Mark Cameron, the vice president of external relations for the Pathways Alliance, stressed the importance of a practical and realistic approach to emissions reduction to protect jobs, investments, and global energy security.
While the Pathways Alliance supports the federal government’s goal of significant emissions reductions by 2030 and achieving net zero emissions by 2050, they believe that the target set for the oil and gas sector is unachievable within the specified timeframe without accounting for production growth.
This view contrasts with the stance of the Alberta provincial government, which opposes any arbitrary emissions cap on oil and gas emissions. Alberta Premier Danielle Smith expressed firm opposition to such regulations, including those targeting methane emissions.
The federal Conservative Party also opposes an Ottawa-imposed cap on oil and gas emissions. Federal Energy Minister Jonathan Wilkinson, working alongside Minister Guilbeault, seeks to develop a framework and regulations that are informed by logic and allow Canada to remain competitive with other oil-producing countries.
Guilbeault stated that the pending framework would provide a clear explanation of the government’s climate policy before drafting the regulations. The framework will also describe the enforcement mechanism that Ottawa intends to use to ensure compliance from oil and gas producers.
The government has indicated the possibility of implementing a cap-and-trade system or increasing carbon pricing on oil and gas producers to align emissions with the cap. The specific emissions limit for the sector has not been revealed, but the framework will outline the emission reduction range.
Canada’s emissions reduction plan aims for oil and gas sector emissions to decline to 110 megatonnes in 2030. The New Democratic Party (NDP) argues that the cap should align with this target. The NDP critic for transport, Taylor Bachrach, emphasized that if the government decides to allow the industry to emit less than the articulated target, a clear explanation should be provided to Canadians and other sectors of the economy about why they are expected to do more.
Alex Cool-Fergus, the national policy manager for Climate Action Network Canada, stressed the urgency of imposing the cap on the oil and gas sector as soon as the framework is released. Cool-Fergus believes that Canada’s emission targets can only be achieved by taking this action.
Minister Guilbeault mentioned that draft regulations would be tabled in the new year or as soon as possible, following the release of the framework. He expressed the importance of imposing the cap in a timely manner.
