The regulations, still only in draft format and about two years behind schedule, could further strain relations between Ottawa and the Alberta government which recently launched a $7-million advertising campaign to “scrap the cap.”
Guilbeault said the oil and gas industry is a major source of emissions, but that it has done less than most other sectors to reduce them in the battle against climate change.“I think most Canadians — even those that aren’t my biggest fans — would agree that it’s not OK for a sector to not be doing its share, and that’s mostly what this regulation is about.”Upstream oil and gas operations, including production and refining, contributed about 31 per cent of Canada’s total emissions in 2022.
Guilbeault said he is aware there will be backlash, but that he is committed to carrying out the Liberal climate goals. The government is also adamant that the regulations can be achieved with existing technology, without cutting production.Guilbeault said federal modelling shows even with the regulations oil and gas production will still rise 16 per cent by 2032, compared with 2019.
The cap does not dictate what companies must do to meet the target, but Guilbeault said the modelling suggests about half the cuts will come from reductions to methane. Those cuts are already happening as oil producers install equipment to prevent the leaks of methane that were a major contributing source of emissions.
The Conference Board of Canada said in March that overall output of oil and gas would grow about 14 per cent without an emissions cap and 1.6 per cent with them. It predicted government revenues, particularly in Alberta, would be much smaller as a result of them.Goldy Hyder, President of the Business Council of Canada, said in a statement ahead of the emissions regulations that imposing a cap is the wrong move for the country.