Canada's Alberta province Sunday announced a new "climate leadership" plan that includes a cap on greenhouse gas emissions by oil sands producers as it moves to overhaul its image and kick start export opportunities.
The cap on emissions has been set at 100,000 mt/year, Alberta's Premier Rachel Notley said while unveiling the plan in Edmonton, which was webcast.
There is currently no cap on greenhouse gas emissions by producers in Alberta, while emissions stand at 70,000 mt/year from total output of almost 2.3 million b/d of raw bitumen, she said.
Alberta will also hike the price of carbon paid by emitters to the province from the current C$15 ($11.20)/mt to C$20/mt from January 2017 and C$30/mt a year later, she said.
It will also introduce a Carbon Competitiveness Regulation in 2018 that will set a price on carbon for industrial emissions, a five-member panel set up by the province said in its report submitted Sunday.
The panel was tasked with suggesting ways to reduce greenhouse gas emissions without discouraging oil sands investments.
"This is the day we start to mobilize the oil industry and stop denying there is an issue [with emissions]," Notley said. "We are turning around a mistaken policy of the past and will put capital to work in green infrastructure."
US KEYSTONE REFUSAL 'KICK IN TEETH'
The province "got a kick on the teeth" when US President Barack Obama in early November denied a permit to Calgary-based TransCanada to build the northern section of the Keystone pipeline that would have shipped 830,000 b/d of crude from western Canada to US Gulf Coast refineries as it was deemed "dirty oil," she said.
"That decision underlined our need to improve our environmental record and reputation and highlighted that we need to do a better job. We are a land-locked producer with a single market and the US took a very hard run at us. We are going to do better," she said.
TransCanada last week withdrew its route application filed with the Nebraska Public Service Commission, effectively bringing the curtains down on a seven-year process to win approval for the Keystone XL pipeline.
Company CEO Russ Girling last week said TransCanada was mulling alternatives as the project still had 100% backing by shippers.
He did not elaborate, but TransCanada's future plans for Keystone XL could include filing a new application after US presidential elections are held in late 2016.
Canada is still the "most logical supplier" of 6 million-7 million b/d of oil the US is expected to import over the next 25 years, he said.
Three other oil export pipelines are also being pursued from Alberta: the 890,000 b/d TransMountain Expansion of Kinder Morgan, for which a final regulatory verdict is due May 2016; the 525,000 b/d Northern Gateway project, for which Enbridge has received regulatory approval with 209 conditions; and TransCanada's 1.1 million b/d Energy East, for which an amendment to the regulatory application was filed late October.
"The targets [for reducing emission levels] are ambitious and come at a difficult time for the industry, but producers will focus more on innovation," the chairman of oil sands producer Canadian Natural Resources, Murray Edwards, said at the launch event.
Alberta's oil sands producers are already investing about C$1.2 billion in 814 technologies, he added.
Canadian Association of Petroleum Producers CEO Tim McMillan said the climate leadership plan may allow producers to invest more aggressively in technologies to further reduce per barrel emissions and improve market access.
Environment Canada recently reported emission levels per barrel by oil sands producers in Alberta were down 30% from 1990 levels, McMillan said, without providing comparative data.
