The Alberta government is targeting Ottawa’s proposed emissions cap on the oil and gas sector in Canada.
The Alberta government is launching a new national advertising campaign against another federal energy and environmental policy — this time targeting the incoming emissions cap on the oil and gas sector.
On Tuesday, the UCP government will roll out a $7-million initiative that calls on Ottawa to “Scrap the Cap,” and says the incoming federal regulations will cost jobs and damage the economy.
It claims the emissions limit will become a cap on Canadian oil and gas production that “will make groceries, gas and all of life’s necessities even more expensive,” and “hurt Canadians from coast to coast to coast.”
“Hopefully it will cause them to take a second look at what they’re planning to put forward,” Alberta Environment Minister Rebecca Schulz said in an interview.
“We need to raise awareness that this is not just an emissions cap. This is, quite frankly, an energy production and Canadian prosperity cap. It’s going to increase the costs of our day-to-day lives.”
The campaign will include print, television, social media and online advertising, and run in Alberta, Ontario, New Brunswick, Nova Scotia and British Columbia.
It follows another advertising effort — called “Tell the Feds” — that the UCP government began last year against the Clean Electricity Regulations.
In its new campaign, one of the province’s advertisements states: “Ottawa’s energy production cap will make groceries more expensive.”
It also asserts the federal proposal would lead to up to 150,000 fewer jobs by 2030, and up to $419 less per month for the average Canadian family to spend.
The province points to several reports released over the past year that outline the economic consequences of the federal policy, including studies for the Alberta government this year by Deloitte and the Conference Board of Canada.
The Deloitte report estimates the cap could lead to a 10 per cent reduction in Canadian oil production and 12 per cent drop in natural gas output by 2030 from its base case, compared with no cap being adopted.
It projects Alberta’s GDP would be 4.5 per cent lower by 2040 and Canada’s GDP would be one per cent smaller compared to its baseline scenario.
The Conference Board of Canada report says the cap would lead to significantly slower growth of the oil and gas sector, down about 11 per cent from the think-tank’s base case.
Its report says the negative economic effects of the cap include 82,000 to 151,000 jobs lost by the end of the decade, and Canada’s nominal gross domestic product (GDP) growth lowered cumulatively between $600 billion and $1 trillion from 2030 to 2040.
Schulz said the province’s assessment of the effect on Canadians’ incomes come from Alberta Finance’s analysis of the two studies.
“When we take those reports into account, and we look at all of those pieces, that domino effect of less money earned, again, means less money to spend, and that would be the impact in terms of a basic cost increase for Albertans and for Canadians,” she said.
Provincial officials say the $419 a month figure factors in the emissions cap and is based on the Conference Board’s projected decline in nominal GDP, divided by the average number of households expected next decade.
After the release of the Deloitte report in June, federal Environment Minister Steven Guilbeault pointed out that Ottawa had not yet finished or unveiled its draft regulations, which are expected to come out later this year.
“How can they come up with these scenarios about production cuts when all they have seen is basically a white paper?” Guilbeault asked reporters at the time.
Canada is the world’s fourth-largest oil producer and fifth-largest natural gas producer. Across the country, the sector employed 211,000 people last month.
It’s also the largest emitting industry in the country, responsible for 31 per cent of all emissions in 2022.
“The oil and gas sector continues to be a significant source of emissions in this country,” Prime Minister Justin Trudeau told a Calgary audience this spring.
“And that’s why we’re talking about putting a cap on emissions — one that we’ve worked closely with the industry on, a cap on emissions, not a cap on production.”
The federal government aims to cut emissions in the country by 40 to 45 per cent by 2030 and reach net-zero status by 2050. It has implemented a national price on carbon and clean fuel regulations.
At last year’s COP28 climate summit in Dubai, the federal government released draft regulations mandating the upstream oil and gas sector cut its methane emissions by at least 75 per cent by 2030 from 2012 levels.
The proposed emissions cap would make Canada the first major oil and gas producer to adopt such a policy.
It seeks to reduce industry emissions by 35 to 38 per cent — from 2019 levels — by the end of the decade. Flexibility measures, such as allowing companies to purchase offset credits, could drop that figure to 20 to 23 per cent.
“Let’s be clear, the oil and gas sector has opposed most of the things we’ve done, whether it’s the clean fuel regulations, whether it is zero-emissions vehicles — less (opposition to) methane, I will give them that — (and) the oil and gas cap,” Guilbeault told a news conference in Ottawa last month.
“It’s a matter of weeks before we will be able to present draft regulations on the cap for the emissions of the oil and gas sector.”
In April, the Pembina Institute said its analysis of the Conference Board’s report on the effect of the cap in 2040 indicates it’s based on modelling of oil and gas production that only extends to 2030, and doesn’t appear to account for an expected market-based decrease in global demand — or Canadian output after this decade.
“As a result, the Conference Board concludes that a cap on emissions could only be achieved through arbitrary production cuts. This conclusion is not supported by the broader body of evidence on the likely global market for oil and gas post-2030,” it stated.
As for the draft regulations, Schulz said she expects the new emissions cap rules could be released by her federal counterpart at next month’s COP29 conference in Baku, Azerbaijan. She also noted the oilsands emissions per barrel have dropped by 23 per cent since 2009.
“We know that the world needs not only Albertan but Canadian energy, but we also need to continue to reduce emissions,” Schulz added.
“We can continue to produce energy and reduce emissions, and continue to support jobs and the overall economies of Alberta and Canada.”