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| More rhetoic from P.M.'s office - Sunday, July 27, 2003 at 23:40 |
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http://www.canada.com/edmonton/story.asp?id=77FCE1DD-EC6D-40A3-9B68-BF47D6B89135 PM vows to protect oilpatch from Kyoto The letter sets out eight guiding principles. Among them, it promises the government will not export Canadian jobs to meet climate change goals, and it will seek the most efficient means to meet emissions reduction targets. "Clarity is important for a sector that spends $25 billion a year," said Pierre Alvarez, president of the Canadian Association of Petroleum Producers, the industry body that received Chretien's July 23rd letter. "I think this is an important step forward." Alberta's Environment Minister Lorne Taylor called the letter a good first step, but said Ottawa still needs to come up with a more definite plan. "The industry needs certainty to continue investment," said Taylor. "We need a specific action plan. General principles always give people wiggle room." Overall, Taylor said, the letter and principles are positive, because they could pave the way to long-term certainty in the implementation of the Kyoto accord. But he didn't like the fact that the principles were sent only to the Canadian Association of Petroleum Producers. "The PM's office never bothered to send them to our premier," he said. Several multibillion-dollar oilsands projects have been delayed or are in doubt because of uncertainties about the future requirements of greenhouse gas emissions policies. TrueNorth Energy's pit mine proposal died in January over fears of cost overruns and Canada's ratification of the Kyoto accord. Canadian Natural Resources Ltd. said it might locate a proposed oilsands upgrader in the U.S. rather than in Alberta. And Petro-Canada sent plans for a new $800-million oilsands project, plus conversion of its refinery to handle heavy oil, back to the drawing board. Chretien's letter attempts to calm those fears, saying that senior government officials and the oil industry have met in past months to discuss how to increase certainty for long-term oilsands development. "Together, industry and government can continue to find innovative ways to reduce greenhouse gas emissions, while maintaining our enviable performance in economic growth and job creation," it says. Chretien's letter "is a clear, unequivocal message that Canada wants to see the oil and gas industry continue to grow," Alvarez said. In his letter, Chretien said the federal government "will agree to lock in the targets for new facilities for up to 10 years from first production in order to provide certainty during the projects' pay-out period." The government will strive to harmonize regulatory policies and enforcement procedures between federal and provincial jurisdictions. Chretien also vowed that the oil and gas sector would not be hit harder than other sectors of the Canadian economy as the nation strives to reduce greenhouse gas emissions to six per cent below 1990 levels by 2012. However, the principles are sometimes vague. For instance, it doesn't explicitly state that the oil and gas sector's maximum emission reduction of 15 per cent will be extended past 2012. It says "the important and enduring principle that no sector will be treated inequitably" will continue past 2012. But that didn't appear to overly worry oil company executives. "I think it's a good letter," said Nexen Canada president Roger Thomas. "I like it all." There remains much to do, however. "It's like laying a conceptual framework from 30,000 feet," he said. "Now we're going to have to spend some time filling in the blanks." Nexen is a half-partner in the $3-billion proposed Long Lake steam-assisted project south of Fort McMurray. John Langille, president of Canadian Natural Resources, said the letter makes it more likely CNRL's upgrader will be built in Canada. "The tone is right." CNRL's entire $8.5-billion Horizon pit-mine project is scheduled to go before a joint federal-provincial regulatory hearing in September. CNRL will make a final decision on the project in 2004, Langille said. Alvarez said he wants further clarification on the increasing federal involvement in oilsands hearings. "We do not want to see increased overlap and duplication," he said. "We don't think it adds to the decisions." Petro-Canada spokesman Rob Andras called Chretien's initiative a first step, but added that his company's reassessment of future projects still must thrash out issues of rising costs and return on investment. Petro-Can is aiming to make a decision by the end of the year. In Fort McMurray, Bill Almdal, co-ordinator of the Regional Issues Working Group, said Chretien's assurance that Canadian jobs would not be sacrificed to achieve climate change goals was very welcome. He and Alvarez also liked Chretien's flexible approach to industrial credits, which may include credit for research to reduce carbon dioxide emissions. - - - 'NO SECTOR WILL BE TREATED INEQUITABLY' The following principles will guide the Government of Canada and the oil and gas sector in pursuing their climate change commitments. - Post-2012 policy and national targets: Future emissions-reduction targets will be guided by the commitment in the Climate Change Plan that "we need not -- and we will not -- export Canadian jobs in order to meet our climate change goals." In particular, the government's intention is that future emissions-reduction targets will not make Canadian oil and gas production uncompetitive. Industry will be consulted on the technical feasibility and economic impacts of targets for the period post-2012. - Efficient implementation: The Government of Canada will seek the most efficient means of implementing climate change policies, drawing on existing reporting and regulatory processes where appropriate. It will promote harmonized policies with a single efficient, federal/provincial/territorial harmonized reporting, verification and policy enforcement system where feasible. - Equitable treatment: The Government of Canada's commitment to a maximum emissions reduction of 15 per cent in the oil and gas sector in the period 2008-2012 reflects the important and enduring principle that no sector will be treated inequitably. This principle will continue to guide policy for the period after 2012. - Other environmental regulations: The "business-as-usual" reference for intensity targets will take into account future federal environmental regulations. A consistent approach across all federal policies will avoid imposing a greenhouse gas penalty on mandated actions to improve environmental performance. - New project phase-in: Emissions targets for new projects will be based on the targets for the best-practice existing facilities using similar technologies, taking into account the specific geological and other characteristics of the projects. The Government of Canada will agree to lock in the targets for new facilities for up to 10 years from first production in order to provide certainty during the projects' pay-out period. - Flexible offset options: Project operators will have flexible options for meeting emission targets. Emissions below targets will generate credits that can be banked or transferred. Offset options will include: a) Offsets generated by reductions in other facilities of the operator; b) Qualifying domestic and international offsets; and c) Exercising the $15/tonne CO2 price assurance provided by the Government of Canada through 2012. - R&D expenditures: Recognizing that innovation and technological advances are the key to significant GHG reductions over time, methods will be developed to integrate into the compliance options an incentive to increase qualifying R&D to reduce carbon intensity. - Tax Treatment: The costs incurred by taxpayers to comply with emission targets and that represent a cost to earn income will be addressed in a manner consistent with other comparable operating and capital expenses.
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