Canada Set to Cap Oil and Gas Emissions

Winter is coming and so is Canada’s oil and gas emissions cap. And while deadlines for its release have been sliding like a moose on an ice rink, the federal government finally looks set to announce the details by the end of the year.

Background: The oil and gas emissions cap is part of the Canadian federal government’s 2030 Emissions Reduction Plan, which targets a 31 percent reduction below 2005 levels, or 42 percent below 2019 levels, by 2030.

What the experts say

To get a broad perspective of the cap, the Daily Oil Bulletin interviewed key energy and climate experts to weight in on the policy.

• Energy policy and strategist: President of GS3 Strategies Greg Stringham said that there are shared views on the need to address climate change and reduce emissions, but opposing views how and when to get there.
   
• Industry groups: CEO of the Explorers and Producers Association of Canada Tristan Goodman questioned the necessity of an emissions cap, saying that research by the International Monetary Fund found Canada’s existing policies align with its Paris Agreement commitments.
  
  Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, raised concerns about how achievable the reductions were without limiting production.
   
• Climate think tanks: Janetta McKenzie from the Pembina Institute advocated for a strong emissions cap, noting the urgency to curb emissions from the oil and gas sector, which accounted for 28 percent of Canada’s emissions in 2021.

Meeting the cap: How the sector could achieve the aggressive cap is still unknown. According to a leaked study from S&P Global by the Globe and Mail, the country would likely have to cut production by nearly 30 percent to achieve the target. Meanwhile, Federal Minister of Energy and Natural Resources Jonathan Wilkinson believes a holistic approach accommodating both sustainability and the economy will avoid sending Canadian production abroad.

Many are keen to see how the cap will look, given the Supreme Court of Canada recently ruled other federal government emissions laws were deemed to be unconstitutional.

Looking ahead: The COP28 climate conference in the UAE is right around the corner, which the Canadian federal government might just view as the ultimate platform to announce the cap.