Canada’s oil and gas industry could lose US$55 billion C$75 billion in upstream investment by 2035 if the federal government implements a stringent 40% emissions cap from 2030, the Canadian Association of Petroleum Producer CAPP says, citing a report by S&P Global Commodity Insights it had commissioned. At the end of last year, Canada’s federal government introduced a draft framework to cap pollution from the oil and gas sector to reduce emissions.
The much lower upstream investment would result in US$181 billion C$247 billion lower GDP contribution between 2024 and 2035 compared to the Reference Case, according to the report. “Instead of supporting emissions reduction in upstream operations, a new cap and trade system adds costs and uncertainty, which stifles investment and will force producers to curtail production to reach compliance,” CAPP President & CEO Lisa Baiton said.