Alberta Tries to Thwart Federal Emissions Cap

---

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The provincial government of Alberta will introduce legislation affirming its sovereignty in order to thwart Canada's federal cap on emissions from the oil and gas sector, its leader said.

Alberta Premier Danielle Smith said Tuesday that her government will introduce an Alberta Sovereignty Within a United Canada Act to stop draft regulation introduced in early November that would obligate the oil and gas industry to cut emissions by 35% from 2019 levels through gradual reductions through 2050.

If passed, enforcement would begin in 2030. Smith, who presides over a province boasting some of the richest oil deposits in the world, called it a job killer.

"We will continue to defend our province from Ottawa's senseless and direct attack," she said. "Our motion protects Albertans' jobs and livelihoods, puts Ottawa back in their place, and ensures we can continue to support global energy security with Alberta oil and gas for decades to come."

Alberta believes the proposal runs afoul of the law. If its measure passes, it would effectively block federal officials out of the provincial energy sector.

Elsewhere, the provincial government said the "extreme" federal measure could lead to a decline in production and a decline in the national workforce. It pointed to independent data from the Conference Board of Canada showing the emissions cap could cut crude oil production by 1 million barrels per day (BBL/d) by 2030 and erase 150,000 jobs from various payrolls.

Canada is the fourth-largest crude oil producer in the world, with much of that coming from Alberta. But extracting the heavy type of crude oil found largely in Alberta is energy-intensive and highly polluting.

The Alberta-based Canadian Association of Petroleum Producers (CAPP), however, said emissions from oil and gas are already down about 2% over the 10-year period ending in 2021. Production on an oil-equivalent basis grew by 37% over the same period.

The provincial government added that it has invested US$56 million on emission reduction strategies, abating some 17 million metric tons of methane emissions since 2020. For its part, the Alberta Energy Regulator estimates that methane emissions from the oil and gas sector are down 52% since 2014, even as production increases.

Alberta may be facing pressure from outside its jurisdiction from tariffs proposed by U.S. President-elect Donald Trump. Even though he signed a free-trade agreement with Mexico and Canada during his first term, Trump said all goods coming into the country would face a 25% tariff when he takes office in January, a tariff that could impact Alberta's oil sector without exemptions.

Canada is the top crude oil exporter to the United States by far, and parts of the U.S. refinery sector are tooled to handle the heavy type of oil found typically in Alberta.

During the seven-day period ending November 11, Canada delivered around 3.8 million BBL/d to the United States. The second-largest exporter, Mexico, delivered 768,000 BBL/d.

Canada has yet to formally respond to Trump's tariff proposals, though the federal government recently introduced a new tax rebate where any Canadian earning up to US$106,000 will get a US$175 check this spring.

"Our government can't set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket," Prime Minister Justin Trudeau said.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).