EXCLUSIVE Alberta to toughen oil sands emissions standards that reward big Canadian polluters

The Suncor tar sands processing plant close to the Athabasca River at their mining operations close to Fort McMurray, Alberta, September 17, 2014. REUTERS/Todd Korol

Feb 14 (Reuters) – The province of Alberta will toughen its greenhouse gasoline emissions requirements for oil sands mines, closing a loophole that rewarded a few of Canada’s highest-emitting amenities with thousands and thousands of {dollars}’ price of tradeable credit, its surroundings ministry advised Reuters.

Alberta is updating business benchmarks that set emissions discount necessities per unit of manufacturing for mines and upgraders, the ministry stated. Canada’s oil sands produce a number of the world’s most carbon-intense crude.

The nation’s largest oil-producing province has already raised the stringency of facility-based benchmarks, a second manner that the federal government units emissions requirements for industrial websites, in response to the ministry.

The federal government was confirming an earlier Reuters report.

Oil sands mines and upgrading amenities, operated by Canadian Pure Sources (CNQ.TO), Suncor Vitality (SU.TO), Imperial Oil (IMO.TO) and others, produce heavy emissions because of the vitality required to separate oil from Alberta’s sand and clay deposits.

Even so, mines and upgraders collectively generated 2.4 million emissions efficiency credit in 2020 and have been required to pay for 700,000, the primary yr of a brand new emissions regulatory system from Premier Jason Kenney’s authorities, in response to public authorities figures.

That comes out to a internet determine of 1.7 million credit, price about C$54.4 million ($42.67 million) to these oil corporations, based mostly on the commerce worth of about C$32 per credit score. Credit commerce at round 80% of the federal carbon worth, which was C$40 per tonne in 2021, when emitters might use 2020 credit for compliance.

Alberta’s emissions system, referred to as TIER (Expertise Innovation and Emissions Discount Regulation), was not meant to supply credit to grease sands mines, two sources with information of the modifications stated.

Alberta’s modifications will imply that mines and upgraders will not financially profit from their emissions after they account later this yr for his or her 2021 efficiency, the sources stated. They weren’t licensed to talk publicly.

Kenney’s authorities overhauled the earlier administration’s emissions-reduction system beginning in 2020, including new flexibility for giant emitters equivalent to oil sands websites.

Massive emitters can select to measure their emissions depth, or carbon per barrel, towards a facility’s previous efficiency, or towards an business benchmark.

“That is basically the issue, {that a} facility can present some steady enchancment and acquire credit, however nonetheless be a excessive emitter and be a comparatively poor emissions performer from its friends,” stated Dave Sawyer, an environmental economist who suggested a earlier Alberta authorities on managing emissions.

Oil sands complete emissions proceed to rise as manufacturing grows, however emissions per barrel are steadily declining as operators undertake new know-how.

“The present loophole is ludicrous however the answer nonetheless does not tackle the elemental downside: Alberta should scale back its absolute emissions, not its relative emissions,” stated Emile Boisseau-Bouvier, local weather coverage analyst at environmental group Equiterre.

A spokesperson for business group Canadian Affiliation of Petroleum Producers stated it has not seen particulars of the modifications and couldn’t remark.

Alberta’s proposed modifications come because the province faces new federal strain to toughen requirements.

Provinces can design their very own system to cost emitters for carbon air pollution, like Alberta’s TIER, or undertake the federal system. Provinces that use their very own system require Ottawa to deem them equal with minimal nationwide stringency requirements.

Ottawa has deemed TIER equal, however is strengthening nationwide standards beginning in 2023 and expects provinces to suggest modifications to their programs quickly to conform, stated a spokesperson for Canadian Surroundings Minister Steven Guilbeault.

In contrast to mines, oil sands in situ websites collectively purchased extra credit than they earned in 2020. It’s because they made much less progress decreasing emissions depth than mines, one of many sources stated.

($1 = 1.2749 Canadian {dollars})

Reporting by Rod Nickel in Winnipeg
Modifying by Marguerita Choy and Leslie Adler

: The Thomson Reuters Trust Principles.