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Vol. 13, No. 23 Week of June 08, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

Canada divided on climate change

Gary Park

For Petroleum News

In a show of muscle-flexing, the Canadian provinces of Ontario and Quebec are embarking on a political form of schoolyard piling on.

Backed by two-thirds of Canada’s 33 million population, the two governments ended an historic joint cabinet meeting June 2 by signing an accord they hope will wrestle control of Canada’s climate change strategy away from the federal government.

In the process they have set the stage for a showdown with Prime Minister Stephen Harper and Canada’s two leading oil and gas producing provinces, Alberta and Saskatchewan.

Premiers Dalton McGuinty of Ontario and Jean Charest of Quebec said their meeting was the “beginning of a further strengthening of an old alliance” in reasserting Central Canada as the nation’s economic heartland.

To start “moving the ball forward,” they plan to introduce what they hope will be a national cap-and-trade system for carbon emissions in 2010, setting a goal of “real reductions” in greenhouse gas emissions and spurning the federal strategy of “intensity-based” cuts in greenhouse gas emissions tied to units of production rather than overall reductions.

They also want to tie the plan to the 1990 baseline set by the Kyoto Protocol rather than the federal proposal to start at 2006 emissions levels.

McGuinty and Charest accused the Harper government of planning to “implement a system that is not in line with Europe or anywhere else.”

Charest said that regardless of who wins the U.S. presidency in November “there will be a 180-degree turn in (U.S. environmental) policies … there will be a (GHG) cap. So why wait for the Americans? Why not take the lead now?”

“By choosing to reduce ‘intensity” levels rather than an absolute reduction of greenhouse gases the (federal government) is out of step. So if you have a choice between a VHS and a Betamax, it seems you go in the direction where technology is headed,” he said.

McGuinty said the inter-provincial trading proposal should ideally serve as the foundation for a national program.

But Alberta and Saskatchewan are emphatic they want nothing to do with a cap-and-trade strategy, fearing that would stifle the rapid development of their petroleum resources, especially in the oil sands of Alberta.

At a meeting May 30, they reiterated their argument for carbon capture and storage as a better way to curb GHGs.

Harper said the national target of a 20 percent GHG reduction per unit of production by 2020 is mandatory and cannot be avoided by the provinces.

Federal Environment Minister John Baird attacked Ontario and Quebec for moving ahead without federal backing.

“It is somewhat disingenuous to sign a piece of paper which is a memorandum of understanding, saying that, because no action is being taken, they are going to set up a trading system.

“We’ve got an aggressive plan, requiring big polluters to cut their greenhouse gas emissions by an absolute 20 percent,” he said.

Baird said the Ontario-Quebec approach could give “big polluters another three or four years before they’re forced to do anything.”

A spokesman for the Alberta government said the lead role being taken by Alberta and Saskatchewan in developing a carbon capture and storage initiative is the “right path” to achieve real reductions in GHGs without undermining the economy.

The Canadian Association of Petroleum Producers has expressed concern about the prospect of a fragmented federal and provincial approach on climate change, raising concern about “dueling regulations.”

But the lobby group was not surprised by the Ontario-Quebec cap-and-trade proposal and limited itself to urging the two provinces to show some recognition as well for the steps being taken in Alberta.



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