Kyoto fury dying down in Canada

Gary Park

Petroleum News Calgary correspondent

The storm created in Canada last year by the Kyoto climate change treaty is abating now that Prime Minister Jean Chretien has pledged safeguards beyond the initial implementation period of 2008-2012.

In a letter to the Canadian Association of Petroleum Producers the week of July 21, Chretien outlined eight principles that form the basis of the government’s Kyoto strategy. He assured the oil and gas sector that it will be treated on the same terms as other industries, without jeopardizing jobs or economic growth.

The petroleum industry’s overriding fear has been the absence of a federal plan beyond 2012 — a shortcoming that has seen billions of dollars worth of oil sands projects slowed or stalled. Chretien dealt with that worry by insisting Canada will not export jobs in order to achieve its greenhouse gas emission targets, saying the 15 percent reduction sought for 2008-2012 will extend past 2012.

He also said emissions levels for new facilities will be locked in for 10 years from first production to offer certainty during the pay-out period.

As well, federal and provincial reporting and enforcement requirements will be harmonized and energy companies that undertake research and development to reduce carbon intensity will qualify for incentives. Pierre Alvarez, president of the Canadian Association of Petroleum Producers, was “encouraged” by the letter which he said went a “long way” to protect C$25 billion in annual oilpatch spending.

But Alberta Environment Minister Lorne Taylor, one of last year’s most outspoken Kyoto critics, said the principles did not constitute an action plan and “that’s what we really need.”