The Liberal government is proposing to use a modified carbon pricing system, or an industry-specific cap-and-trade system, to set a ceiling for emissions from the oil and gas sector..In a discussion paper tabled on Monday by Environment Minister Steven Guilbeault, the federal government explored the two options for driving oil and gas emissions down 40% by 2030..Canada's oil and gas industry accounts for more than a quarter of the country's total emissions. Last April, Guilbeault said in Parliament that the sector's portion of emissions was a factor "we simply cannot ignore.".The discussion paper did not specify what the cap for oil and gas emissions will be for 2030. But background documents and government sources suggest the cap will be similar to the one proposed in the new national Emissions Reduction Plan in March..That would be 110 million tonnes, or a 46% decrease from 2019 levels. Canada aims to cut emissions across all sectors by 40% to 45% from 2005 levels by the end of the decade..The first proposed plan would put a new cap-and-trade system on the oil and gas sector in isolation. The government would divide the total emissions allowed by the sector into individual allowances to then be allocated to specific companies mainly through an auction..Companies that don't buy enough allowances to cover their emissions would have to buy allowance credits from other oil and gas companies that purchased more than needed. The funds raised from auctions would then be put towards programs that help the industry cut emissions..The second choice would modify the existing carbon price for the oil and gas sector. This could be done by hiking the price itself to ensure emissions continue to fall by limiting the trading of carbon credits..The federal government will accept input on the options to manage the emissions cap until September 21. Guilbeault will unveil the final plan in early 2023..In response to the paper, Conservative MP Michelle Rempel Garner said the prime minister is "oblivious to the jurisdictional right of provinces to develop their natural resources."."He also seems indifferent to the financial strains that Canadian families are currently facing every time they fill up their vehicles at the pump," the MP for Calgary Nose Hill, Alberta, said.."The Trudeau Liberal government should allow Alberta to determine its own path on natural resource development, which already includes a cap on carbon energy production emissions.".NDP MLA and energy critic Kathleen Ganley said the party favours reducing emissions "across all sectors, right across Canada.".“We will be reading this paper closely to determine what assumptions the federal government is making in terms of future production growth in Alberta’s energy sector and the performance of evolving technologies such as CCUS and energy storage," she said.However, the MLA for Calgary-Buffalo said any plan to reduce emissions must include a "high level of detail and the resources necessary" to protect good-paying Alberta jobs."An Alberta NDP government will always stand up for Alberta workers and their families," she said.Bill Bewick, the executive director of Fairness Alberta, said the emissions cap scheme is "another piece of the Unjust Transition campaign coming out of Ottawa, which hurts all of Canada, but Albertans most of all."Bewick said the policy will make investments in Canadian oil and gas uncompetitive with other justisdictions, noting that the carbon price of the oil-producting state of Texas is zero."This 'leakage' of investment to other jurisdictions makes no sense, as it does not reduce global greenhouse gases, while it impoverishes Canada and enriches dictators like Putin."
