Varcoe: Alberta business leaders ask Ottawa to ditch emissions cap

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An fascinating mixture of CEOs, executives and enterprise group leaders signed an open letter Wednesday to federal Surroundings Minister Steven Guilbeault, opposing Ottawa’s oil and gasoline emissions cap.

Some signatures, reminiscent of ones belonging to the brand new president of Canadian Pure Sources or CEO of Cenovus Power, appear logical. Their corporations are among the many greatest petroleum producers within the nation.

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Others got here from leaders on the Canadian and Calgary Chambers of Commerce — the native group penned the letter — nervous a couple of vary of points, such because the coverage’s impact on the economic system and the nation’s lagging productiveness ranges.

Kevin Krausert, CEO of Avatar Improvements, which launched a preferred clear power accelerator and coaching program within the metropolis, hones in on the repercussions it can have on decarbonization spending.

“We’re the one oil-producing jurisdiction on the planet proposing an emissions cap, versus determining how we drive funding into these kinds of initiatives,” Krausert mentioned in an interview.

“The query Canada has to ask ourselves is: Can we wish to win within the power transition, or can we wish to simply proceed alongside a needlessly complicated and burdensome funding atmosphere that isn’t aggressive with the U.S., Europe or the Center East?”

The very factor the Liberal authorities is striving to do — get corporations to spend cash to decrease greenhouse gasoline emissions — could possibly be put in danger by creating extra funding uncertainty.

And if the federal cap strikes forward as proposed it can certainly result in a courtroom problem by the provinces, which have constitutional rights to make legal guidelines surrounding useful resource growth.

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“We’re assuming good intentions, that they’re listening to what has been offered to them,” mentioned Calgary Chamber of Commerce CEO Deborah Yedlin.

“Is there a stage of frustration that I sense? Completely.”

By late afternoon, greater than 35 Alberta enterprise homeowners, operators, executives or teams had signed the letter, throughout a spread of sectors, from an auto dealership group to a medical spa proprietor.

The oil and gasoline trade is the most important emitting sector within the nation, accounting for 28 per cent of Canada’s greenhouse gasoline emissions in 2021.

As proposed, the cap would require sector emissions to fall by as much as 38 per cent under 2019 ranges by the tip of the last decade. Nevertheless, flexibility measures may decrease that to twenty per cent.

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Many trade gamers have already adopted a net-zero emissions goal.

Oilsands producers are collaborating to realize that aim, growing a proposed $16.5-billion carbon seize community. Final week, the Pathways Alliance group filed a regulatory software for the undertaking’s CO2 trunk line.

Nevertheless, a closing funding determination remains to be required. Different decarbonization proposals are additionally being superior.

“The oil and gasoline trade wants funding certainty to get these initiatives going. The emissions cap does the other,” added Krausert.

“It’s the flawed deal with the flawed downside.”

The open letter to Guilbeault calls the proposed federal coverage a “blunt instrument” that may have profound penalties, stranding funding and innovation.

The chamber notes Alberta already has a carbon worth on heavy emitters. Canada’s nationwide worth on carbon is slated to rise to $170 per tonne by the tip of the last decade.

Ottawa is requiring the sector minimize its methane emissions by 75 per cent by 2030. It has additionally launched new clear gas requirements.

The trade and the Alberta authorities preserve the cap will restrict oil and gasoline manufacturing.

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The cap may even “compromise the valuation” of Ottawa’s deliberate sale of its Trans Mountain pipeline — if it dangers regular oil manufacturing ranges — and inhibit the flexibility of Indigenous communities to take part in and personal power developments in Canada, the letter states.

The group desires the Trudeau authorities to kill the cap and advance funding and promised incentives in decarbonization insurance policies, such because the long-awaited federal funding tax credit score for carbon seize initiatives and promised carbon contracts for distinction.

Rhona DelFrari, chief sustainability officer of Cenovus Power, mentioned it’s necessary that leaders in a number of industries and teams are talking out.

“A sector-specific emissions cap is pointless,” DelFrari mentioned. “Including on yet another regulation, to people who are already in place, merely provides further complexity, and it’ll do nothing to incent further emissions reductions.”

A pointy response by Guilbeault to the open letter left little doubt the hole between each side is rising.

In a press release, Guilbeault identified that draft guidelines for the coverage haven’t been launched but, “so until the Calgary Chamber of Commerce is aware of one thing we don’t, the conclusions they’re drawing are extraordinarily untimely.”

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The federal atmosphere minister mentioned its proposed method “holds trade accountable” for what it’s already promised to do — minimize emissions.

And he reiterated Ottawa is limiting oil and gasoline trade emissions, not capping manufacturing.

“The premise is sort of merely false,” he acknowledged.

“The extra we incentivize oil and gasoline corporations and executives to reinvest their windfall income — which have ballooned to extraordinary heights over the previous variety of years — the extra shovels-in-the-ground initiatives we create to chop air pollution . . . We’re placing individuals forward of massive company income.”

Such rhetoric will solely inflame the state of affairs.

“I don’t suppose that this (open letter) is more likely to persuade the federal authorities,” mentioned Richard Masson, an government fellow on the College of Calgary’s College of Public Coverage.

On the legislature, Alberta Surroundings Minister Rebecca Schulz famous enterprise organizations have been attempting to work with the federal authorities, with little success.

“They’re (now) saying, ‘You understand what — sufficient is sufficient, we’re going to step up and defend ourselves,” Schulz added.

“We’ll completely see (Ottawa) in courtroom if we don’t see reasonableness on this space of coverage.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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