Moe condemns Canada’s coming emissions cap for oil and gas sector

Saskatchewan’s premier says new rules from Ottawa that put a cap on greenhouse gas emissions by the oil and gas industry will have “serious economic impacts on Canadians.”

Under the policy framework, which was unveiled on Thursday, the industry will need to reduce emissions by more than a third or purchase offset credits through a cap-and-trade system. More details are expected when draft regulations are published next spring, and the final rules are expected to be in place by 2025.

The framework said the sector will need to reduce its emissions 35 to 38 per cent from 2019’s levels within the next seven years, but by purchasing credits or contributing to a “decarbonization fund,” the requirement could be lowered to cutting 20 to 23 per cent.

The announcement Thursday follows a 2021 election promise by the federal Liberals to introduce a cap on emissions by the industry, and Environment Minister Steven Guilbeault said reducing emissions by the industry – which accounts for more than a quarter of the nation’s emissions – is essential to meeting the climate targets his government has committed to.

He said Thursday is a major step forward.

“I think what we’re doing is historical not just in the Canadian context but in the international context as well,” Guilbeault said. “We’ve never put in place regulations in Canada that would ensure that the oil and gas sector reduces its overall emissions. We’ve never done that.”

Saskatchewan Premier Scott Moe said his government opposes the introduction of a cap.

“The emissions cap targets Canada’s upstream oil and gas sector, which is already impacted by federal carbon pricing, increasingly stringent federal methane regulations, and the federal Clean Fuel Regulations and Clean Electricity Regulations,” Moe said in a statement.

“These new federal policies will have serious economic impacts on Canadians and limit our sustainable Canadian energy products from providing heat and electricity to the world.”

Moe also strongly opposed new rules around methane emissions by the oil and gas industry, saying that both federal announcements came during COP28, the United Nations’ climate change conference in Dubai. Moe is in attendance at the conference, as is Guilbeault.

“Canadian oil and gas producers have been showing the world that they produce some of the most sustainable energy products on the planet,” the premier said.

“Instead of taking the opportunity to promote Canada’s sustainable oil and gas industry on the world stage as Saskatchewan is doing, the federal government’s response has been to impose two new policies just this week, on methane and an oil and gas cap, that target this sector and burden it with more red tape and regulations.”

Moe noted that Saskatchewan has made “significant steps” in reducing emissions without having a cap in place, and pointed to the Saskatchewan First Act, which he said grants the province “exclusive legislative jurisdiction” over non-renewable resources and the regulation of greenhouse gas emissions.

“Saskatchewan remains opposed to the new methane regulations and the oil and gas emissions cap, and we will protect our constitutional right to build our economy in accordance with the priorities of Saskatchewan families and businesses,” Moe said.

Moe is also currently embroiled in another environmental battle with Ottawa, as he has directed Saskatchewan Crowns to stop collecting Ottawa’s carbon tax on home heating in response to an exemption that applies largely to the Atlantic region.

– With files from The Canadian Press