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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2015

Vol. 20, No. 18 Week of May 03, 2015

Cross-border harmony — with conditions

Canada discloses talks with US on joint effort to lower carbon emissions; Harper says sides will likely agree on similar objectives

Gary Park

For Petroleum News

Canada’s greenhouse gas emissions have far exceeded the government’s international commitment for 2020, prompting efforts by Prime Minister Stephen Harper to open talks with the United States on ways to curb cross-border emissions in the oil and gas sector.

He has pledged to join the U.S. in introducing tougher fuel efficiency standards and accelerating the phase out of coal-fired power plants, although there would be no measurable result from those steps until well into the next decade.

However, that surprise announcement came with a condition from Harper who said it is “unlikely” Canada and the U.S. will set identical targets, although their objectives will be “similar to other major industrialized countries.”

Previously in lockstep

Canada has previously operated in lockstep with the U.S. in setting GHG-reduction targets, but the two could part ways on Harper’s refusal to introduce carbon taxes under a cap-and-trade system.

“The reason governments do carbon taxes is not so they can reduce emissions, it’s so they can get more tax revenue in their pockets,” he said.

An insight into Canada’s negotiating position is expected in June when Harper unveils Canada’s revised GHG targets as part of the buildup to an expected federal election in October and a United Nations climate summit in Paris before Christmas.

His toughest challenge is to convince critics in Canada and globally that he is serious about tackling emissions when the oil sands are identified as one of the planet’s leading environmental enemies.

Oil sands growing source of emissions

The difficulty facing the Harper administration is contained in Environment Canada’s latest assessment of trends in GHGs that show Alberta’s oil sands were the fastest-growing source of emissions in the 2005-13 period, even though it trails the transportation and electricity sectors.

Emissions from the oil sands over the eight years climbed to 62 million metric tons a year from 30 million metric tons.

In contrast, the Ontario government’s decision to close coal-fired power plants reduced emissions from the electricity sector by 36 million metric tons from 121 million metric tons.

The Harper government has constantly claimed that Canada’s overall production of GHGs has decreased since 2005, but that included a steep drop during the 2008-09 recession.

Emissions rising

The bottom line for Canada is that emissions are rising, putting beyond the government’s reach any hope of achieving the 2020 target of reducing emissions by 17 percent from 2005 levels, a goal set by Harper in 2009.

Environment Canada tried to put the best spin it could on the latest statistics, noting that emissions’ growth has slowed since 2009, even during an economic recovery.

“Over the long term, the link between growth in Gross Domestic Product and emissions has weakened, resulting in the decoupling of economic growth and emissions,” the report said.

In contrast, the United States reported to the United Nations that its GHG emissions rose by 2.2 percent in 2013, but were still 10 percent below 2005 levels.

Louise Comeau, executive director of Canada’s Climate Action Network, said the Harper government is a laggard in giving priority to reducing GHGs, rating the administration’s efforts as “weak and late.”

Concern over competition with US

Natural Resources Minister Greg Rickford hinted at a shift by his government, which has failed to set GHG regulations for the oil and gas industry, claiming that any unilateral moves would place Canada at a disadvantage in competing with the United States.

Now, he said, Canada and the United States are “all in this together,” and, although Canada accounts for only 1.6 percent of the world’s GHGs, Canada will “be there for any discussions to strengthen global targets.”

But Rickford was not prepared to reverse Canada’s support for Keystone XL.

He agreed with the U.S. State Department that the “environmentally responsible choice” is to approve the pipeline on its merits, to “create jobs, encourage better environmental performance and enhance the largest energy trade relationship in the world.”

Rickford forecast that U.S. Energy Secretary Ernest Moniz and Mexico’s Energy Secretary Pedro Joaquin Coldwell along with Canada will make advances on an energy and environment pact over the next month, without creating “any unfairness or imbalance in the competitive edge of our respective jurisdictions.”

He said “initial signals” from the U.S. on achieving a common GHG emissions approach are now “favorable” following an agreement by the two governments last September to enhance collaboration in 11 areas of energy development and consumption.






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