Throwing good money after bad. Even with carbon capture and storage (CCS).That’s the position Alberta’s oil companies would find themselves in under Ottawa’s proposed emissions cap, according to a new report from Deloitte Canada.According to the national consulting firm, the emissions rules would make it more economical to simply leave barrels in the ground, costing the Canadian economy $282 billion in lost GDP over 10 years — $191 billion in Alberta alone.And despite assertions from the Liberal government that an emissions cap doesn’t amount to a production cut, Deloitte says it would effectively shutter more than 626,000 barrels per day (bpd) by 2030, or more than 10% of Alberta’s oil output and 16% of natural gas.Similar effects would be felt in British Columbia, Saskatchewan, and Newfoundland and Labrador..Though carbon capture could help offset those emissions, the report found that in most cases it’s too expensive to be a viable business proposition.It’s the third report commissioned by the UCP government this year finding that a federal cap will require deep production cuts, lead to billions in lost GDP and damage the Canadian economy.“Three internationally respected firms have now shown that the federal emissions cap will devastate Alberta’s economy and hurt all of Canada,” Environment Minister Rebecca Schulz said in a statement. “There can no longer be any debate. Let’s scrap the cap and reduce emissions without hurting Canadians.”.“This report shows that the cap will harm GDP, cost jobs, and weaken investment. There are ways to reduce emissions without harming our collective wellbeing, and it’s time to give up on this failed idea,”Finance Minister Nate Horner.The report found government tax revenues would be reduced by 5.8% in Alberta and 1.3% in Canada overall by 2040.Approximately 90,000 jobs would be lost across Canada. More than half — 55,000 jobs — followed by 12,000 from Ontario and 2,500 from Quebec.Deloitte’s analysis was based on its independent technical assessment of viable technologies and ongoing efficiency gains to reduce emissions, including the level of carbon capture and storage that it considered likely to be in place by 2030.Notably, the negative impacts would be “transmitted through supply chains and across sectors including mining, refining products, utilities, agriculture and forestry, construction and services sectors.”The findings are consistent with prior assessments..In January, the Conference Board of Canada found that the proposed cap would eliminate 80,000–150,000 jobs by 2030 and reduce Canada’s nominal GDP by $600 billion or more between 2030 and 2040. The results were publicly released as part of Alberta’s technical response to the Federal Oil and Gas Emission Framework.In May, S&P Global Commodity Insights found that a 40% emissions cap could lead to a reduction in oil and natural gas production of one million bpd by 2030 and a 2.1 million bpd by 2035. It also found that the cap would result in $75 billion less in industry spending by 2035 and $247 billion less GDP between 2024 and 2035..While the Deloitte, Conference Board of Canada and S&P Global analyses each contained unique assumptions, all three models found the federal emissions cap requires oil and gas production cuts and negatively impacts investment and economic activity across Canada.“This report shows that the cap will harm GDP, cost jobs, and weaken investment. There are ways to reduce emissions without harming our collective wellbeing, and it’s time to give up on this failed idea,” added Finance Minister Nate Horner.
