Technological leadership is key to a balanced climate policy

October 02, 2015 - Calgary, Alberta
Alberta can become both a stronger world leader in the fight against climate change and a more competitive place to invest in oil and gas if it strikes the right balance with its new climate policy, the Canadian Association of Petroleum Producers said today.

“The Alberta government, the public and our industry share a common goal to grow the development, production and export of our abundant oil and natural gas resources in an increasingly environmentally responsible way,” said CAPP president and chief executive officer Tim McMillan.

CAPP called on the Alberta government to set a target for technology investment over the next 10 years as its climate ambition. Funds from Alberta’s emissions charge, recently doubled to $30 per tonne by 2017, would be invested to develop and deploy new emission-reducing technologies in the oil and gas sector that could have broader economic and environmental implications.

“Alberta can diversify its economy and become the global hub for the development of new emissions-cutting technologies that we can then export to the world’s oil and gas sector,” McMillan said. “In our generation, we can make Alberta’s oilpatch the high-tech environmental leader of the world.”

Canada’s oil sands producers are working together on 777 technologies and best practices through Canada’s Oil Sands Innovation Alliance to find innovative solutions to reduce greenhouse gases, minimize impact on land, reduce water use and improve tailings management.

Accelerated technological leadership was one of the three themes CAPP tabled in its submission to the Alberta climate change advisory panel. CAPP’s submission outlined how to achieve the twin goals of growing the oil and natural gas sector to encourage investment, create government revenues and support jobs, and further reducing emissions intensity.

“First and foremost, technology is key – it builds on our strength, builds on our track record, and is the key to unlocking the value of Canada’s oil and gas resources while continuing to reduce emissions,” McMillan said.

One recommendation in CAPP’s submission is to develop an incremental clean infrastructure royalty credit program. Such a program would encourage adoption of technologies that reduce the emissions impact of oil and gas development while protecting the industry’s competitiveness. The province also would benefit through potential incremental royalties from resource development encouraged by the new program.

“We have in Canada the energy the world needs, and developing it creates jobs and prosperity for all Canadians,” McMillan said. “Greenhouse gas reduction is a global issue, so we need to find the right balance to continue producing energy for the world.”

CAPP also proposed other near-term transition actions for the climate panel to consider for more immediate impact on emissions while encouraging responsible energy development.

For example, CAPP recommended the panel consider natural gas as a lower-emitting fuel that, used in power generation, can achieve significant carbon dioxide emissions reductions and could virtually eliminate emissions of smog-causing particulate matter. Exporting Canadian natural gas can have a global environmental net benefit by allowing countries, such as China, shift to greater use of this cleanest burning hydrocarbon.

“Natural gas is clean, abundant and affordable in Alberta,” McMillan said. “If we use and export more of it, we could help reduce emissions at home and abroad, generate more government revenue and put more Albertans to work.”
Finally, CAPP’s submission also stressed Alberta’s climate policy must help re-establish the province’s competitive edge to enable industry to retain and attract investment.

“As the panel completes its work and provides its views to the government, we encourage both to be mindful of the growing, cumulative costs of government policies and of the need to re-establish Alberta as a jurisdiction that retains and attracts investment,” McMillan said.

“If Alberta does not take a balanced approach to setting its targets, price and timelines, it could eliminate the competitiveness of Alberta’s oil and gas industry, putting billions of investment and thousands of jobs at risk,” McMillan said.

CAPP’s submission to the climate change advisory panel can be viewed here.