Stewart Muir is the host of the Power Struggle podcast and the CEO & founder of Resource WorksImagine a small natural gas well on the prairies, emitting a modest amount of methane — a potent greenhouse gas. An engineer identifies a straightforward fix, but then finds he faces a labyrinth of new federal regulations that transform this simple repair into a costly, protracted ordeal. This scenario exemplifies how well-intentioned policies can veer off course, as seen with Canada’s recent methane regulations.The federal government’s commitment to reducing methane emissions by 75% by 2030 will sound commendable to many voters. However, the approach raises concerns. The proposed regulations are projected to impose $15.4 billion in new costs by 2040, equating to $71 spent for every tonne of emissions reduced — a figure four times higher per tonne than previous methane reduction efforts. While Ottawa justifies this by citing the “social cost of carbon” at $273 per tonne, this abstract metric doesn’t alleviate the immediate financial burden on Canadians.The Canadian Manufacturers & Exporters (CME) have expressed reservations, urging a reassessment of the cost-benefit analysis underlying these regulations. This isn’t mere industry pushback; it’s a call for policies that genuinely serve the public interest. A robust cost-benefit analysis should act as a safeguard, ensuring that regulations achieve their intended environmental goals without inflicting undue economic harm. Instead, contends CME, the federal environment ministry’s cost-benefit analysis lowballed the costs to industry and assumed away any impacts to production.The financial implications of these regulations won’t be confined to corporate balance sheets. They will ripple through the economy, potentially leading to reduced investments, project cancellations, and job losses. Consumers may face higher energy costs, affecting everything from heating bills to the price of goods reliant on natural gas. Such outcomes could erode public support for environmental initiatives, undermining the very objectives these policies aim to achieve.International experiences offer cautionary tales. Some European nations, in their zeal for rapid green transitions, decommissioned traditional energy sources without securing reliable alternatives. This led to energy shortages and increased reliance on coal — a counterproductive outcome. Canada must avoid similar pitfalls by ensuring that environmental policies are balanced with economic realities.And since Canadian gas exports today are all sent to the United States, anyone following the news will surely be wondering how the Boy Scout efforts of Canada are going to line up with emerging American policy trends. Provincial leaders also have concerns. Alberta’s environment minister labeled Ottawa’s methane plan as “unworkable and unnecessary,” highlighting significant flaws in the federal modeling and analysis. Alberta’s analysis suggests that the regulations could cost $9.4 billion in the province alone, leading to substantial reductions in oil and gas output. Such a scenario would have profound implications for local economies and employment.The law of unintended consequences looms large. Overly stringent regulations could force smaller producers to cease operations, shifting energy production to countries with less rigorous environmental standards. This not only undermines global emission reduction efforts but also compromises Canada’s energy security and economic vitality.A more balanced approach is essential. Targeting the largest sources of emissions first, incentivizing innovation, and providing flexibility in compliance timelines can achieve environmental goals without sacrificing economic stability. Collaborative efforts between government and industry, such as offering tax credits for the development of advanced leak detection technologies, can drive progress.Policymaking requires humility and adaptability. Reevaluating the cost-benefit analysis with comprehensive input ensures that policies are both effective and equitable. Adjusting course based on new information isn’t a sign of weakness but of prudent governance. Environmental progress and economic vitality are not mutually exclusive; achieving both necessitates thoughtful, informed decision-making.It is often argued that bold action on climate change is imperative, regardless of cost. However, policies that inflict economic pain without delivering proportional environmental gains are neither righteous nor effective. Balanced policies that protect the climate while sustaining the economy serve the true public interest. Environmental initiatives should enhance the quality of life for all Canadians, not impose undue hardships.Canada’s tradition of pragmatism, coupled with idealism, positions us to achieve both environmental sustainability and economic prosperity. It’s imperative that our leaders maintain this balance, keeping their aspirations grounded in the realities faced by all Canadians.In conclusion, rational, balanced policymaking isn’t just an ideal — it’s a necessity. Many federal officeholders seeking re-election are now lining up to say that after 10 years of driving often punishing federal policies, they’ve had a change of heart and would like to support industry after all. Here’s a chance for them to put (our) money where their mouth is. It’s clear what is needed now to keep our nation’s exports competitive at a moment of unprecedented national peril.Stewart Muir is the host of the Power Struggle podcast and the CEO & founder of Resource Works.
Stewart Muir is the host of the Power Struggle podcast and the CEO & founder of Resource WorksImagine a small natural gas well on the prairies, emitting a modest amount of methane — a potent greenhouse gas. An engineer identifies a straightforward fix, but then finds he faces a labyrinth of new federal regulations that transform this simple repair into a costly, protracted ordeal. This scenario exemplifies how well-intentioned policies can veer off course, as seen with Canada’s recent methane regulations.The federal government’s commitment to reducing methane emissions by 75% by 2030 will sound commendable to many voters. However, the approach raises concerns. The proposed regulations are projected to impose $15.4 billion in new costs by 2040, equating to $71 spent for every tonne of emissions reduced — a figure four times higher per tonne than previous methane reduction efforts. While Ottawa justifies this by citing the “social cost of carbon” at $273 per tonne, this abstract metric doesn’t alleviate the immediate financial burden on Canadians.The Canadian Manufacturers & Exporters (CME) have expressed reservations, urging a reassessment of the cost-benefit analysis underlying these regulations. This isn’t mere industry pushback; it’s a call for policies that genuinely serve the public interest. A robust cost-benefit analysis should act as a safeguard, ensuring that regulations achieve their intended environmental goals without inflicting undue economic harm. Instead, contends CME, the federal environment ministry’s cost-benefit analysis lowballed the costs to industry and assumed away any impacts to production.The financial implications of these regulations won’t be confined to corporate balance sheets. They will ripple through the economy, potentially leading to reduced investments, project cancellations, and job losses. Consumers may face higher energy costs, affecting everything from heating bills to the price of goods reliant on natural gas. Such outcomes could erode public support for environmental initiatives, undermining the very objectives these policies aim to achieve.International experiences offer cautionary tales. Some European nations, in their zeal for rapid green transitions, decommissioned traditional energy sources without securing reliable alternatives. This led to energy shortages and increased reliance on coal — a counterproductive outcome. Canada must avoid similar pitfalls by ensuring that environmental policies are balanced with economic realities.And since Canadian gas exports today are all sent to the United States, anyone following the news will surely be wondering how the Boy Scout efforts of Canada are going to line up with emerging American policy trends. Provincial leaders also have concerns. Alberta’s environment minister labeled Ottawa’s methane plan as “unworkable and unnecessary,” highlighting significant flaws in the federal modeling and analysis. Alberta’s analysis suggests that the regulations could cost $9.4 billion in the province alone, leading to substantial reductions in oil and gas output. Such a scenario would have profound implications for local economies and employment.The law of unintended consequences looms large. Overly stringent regulations could force smaller producers to cease operations, shifting energy production to countries with less rigorous environmental standards. This not only undermines global emission reduction efforts but also compromises Canada’s energy security and economic vitality.A more balanced approach is essential. Targeting the largest sources of emissions first, incentivizing innovation, and providing flexibility in compliance timelines can achieve environmental goals without sacrificing economic stability. Collaborative efforts between government and industry, such as offering tax credits for the development of advanced leak detection technologies, can drive progress.Policymaking requires humility and adaptability. Reevaluating the cost-benefit analysis with comprehensive input ensures that policies are both effective and equitable. Adjusting course based on new information isn’t a sign of weakness but of prudent governance. Environmental progress and economic vitality are not mutually exclusive; achieving both necessitates thoughtful, informed decision-making.It is often argued that bold action on climate change is imperative, regardless of cost. However, policies that inflict economic pain without delivering proportional environmental gains are neither righteous nor effective. Balanced policies that protect the climate while sustaining the economy serve the true public interest. Environmental initiatives should enhance the quality of life for all Canadians, not impose undue hardships.Canada’s tradition of pragmatism, coupled with idealism, positions us to achieve both environmental sustainability and economic prosperity. It’s imperative that our leaders maintain this balance, keeping their aspirations grounded in the realities faced by all Canadians.In conclusion, rational, balanced policymaking isn’t just an ideal — it’s a necessity. Many federal officeholders seeking re-election are now lining up to say that after 10 years of driving often punishing federal policies, they’ve had a change of heart and would like to support industry after all. Here’s a chance for them to put (our) money where their mouth is. It’s clear what is needed now to keep our nation’s exports competitive at a moment of unprecedented national peril.Stewart Muir is the host of the Power Struggle podcast and the CEO & founder of Resource Works.
