Canada's Energy-Rich Alberta to Cap Oil-Sands Emissions, Phase Out Coal-Fired Electricity
November 22 2015 - 5:57PM
Dow Jones News
By Chester Dawson
CALGARY, Alberta--The government of oil-rich Alberta province in
western Canada on Sunday pledged to phase out coal emissions by
2030, limit greenhouse gases from oil-sands production and
implement an economywide carbon tax.
The province unveiled the long-awaited plan one day ahead of a
meeting in Ottawa among Prime Minister Justin Trudeau, Alberta
Premier Rachel Notley, and the leaders of other Canadian provinces
and territories to discuss environment policy. Mr. Trudeau has
pledged to develop a framework for reducing greenhouse-gas
emissions before a United Nations summit on Nov. 30.
The plan comes at a challenging time for coal and oil producers
in western Canada that are struggling to cope with low commodity
prices.
"Our goal is to become one of the world's most progressive and
forward-looking energy producers," Ms. Notley said at a news
conference in Edmonton. "We are turning the page on the mistaken
policies of the past."
The premier described President Barack Obama's rejection of the
Keystone XL pipeline earlier this month as a "kick in the teeth"
and a wake up call for Canada to improve the province's
environmental reputation. Mr. Obama cited Alberta's "dirtier crude
oil" in his decision not to approve the project, which is designed
to carry oil-sands crude from Alberta to the U.S. Gulf Coast.
Flanked by oil industry executives and representatives from
Native American and environmental groups, Ms. Notley said the new
levies would be "revenue neutral" to offset other taxes, and that
some funds will be set aside to research energy technologies.
Ms. Notley's left-leaning government swept into power in May,
ousting a right-of-center party that ruled the province for four
decades and had played down the urgency of policies to address
global climate change. Weeks later, Alberta said it would double
its existing carbon tax on large-scale industrial emitters to 30
Canadian dollars ($22.50) per metric ton by 2017.
That tax will be extended across the province's economy by
instituting levies on sales of gasoline and on household utility
bills. Alberta also will end coal-fired generation of electricity
and mandate that renewable forms of energy account for 30% of
electrical production by 2030. Coal currently accounts for about
38% of Alberta's electrical generation capacity, with natural gas
making up 44% of the total. The remainder comes from renewables
such as hydroelectric generation, biomass and wind.
The government also said it would enact a limit on total
oil-sands emissions of greenhouse gases of 100 million metric
tons.
Alberta's oil sands are one of the most emissions-intensive
forms of crude extraction. Oil-sands wells require steam injections
to leach out crude embedded in sand, a process that burns up to
1,000 cubic feet of natural gas to produce a single barrel of oil.
Canada's government estimates that oil sands-related emissions will
nearly double to 103 million metric tons by 2020.
Oil and gas producers in Alberta had expressed concerns about
the rapid policy shift in recent weeks. But four of the biggest oil
sands producers, including Suncor Energy Ltd., Canadian Natural
Resources Ltd., Cenovus Energy Inc. and the Canadian unit of Royal
Dutch Shell PLC, on Sunday said they backed the new initiative,
noting it would accelerate clean- energy technology investment.
"This plan recognizes a need for a balance between the
environment and the economy," Murray Edwards, chairman of Canadian
Natural Resources, said at the news conference. "We will do our
part to address climate change while protecting jobs and industry
competitiveness," he said, speaking on behalf of the province's top
oil-sands producers.
Production from the oil sands has been growing at a steady clip
in recent years, making the industry one of the fastest-growing
contributors to rising Canadian carbon emissions. Canada's
environment ministry says the country's CO2 emissions have risen
over the past five years and are expected to hit 781 million metric
tons a year by 2020 if no reduction measures are taken.
"Meaningful action in Alberta was long overdue," Alberta's
environment minister, Shannon Philips, said at the news conference.
She called climate change "the single greatest threat to our health
and out economy."
Write to Chester Dawson at chester.dawson@wsj.com
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(END) Dow Jones Newswires
November 22, 2015 17:42 ET (22:42 GMT)
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