The leading exclusive-emitting oil sands site in Canada collects government relief from pollution payments

FILE PHOTO: Canadian Natural Resources Limited's Primrose Lake oil sands project is seen near Cold Lake, Alberta
FILE PHOTO: Pipes at the Primrose Lake oil sands project by Canadian Natural Resources Limited (CNRL) are seen near Cold Lake, Alberta August 8, 2013. REUTERS/Dan Riedlhuber/File Photo

December 8, 2021

By Rod Nickel

WINNIPEG, Manitoba (Reuters) – For three years in a row, the government of Alberta has allowed Canada’s highest-emissions oil sands production facility to cut payments that polluters must make in order to generates higher emissions than most industries, a government document shows.

Between 2018 and 2020, Alberta reduced Canadian Natural Resources Ltd (CNRL) costs for the Peace River oil production site to comply with provincial emissions requirements. Peace River’s emissions per barrel are three times higher than the already high oil sands average.

CNRL, Canada’s largest oil producer, with an adjusted profit of 2.1 billion Canadian dollars (US$1.66 billion) in the third quarter, is one of six companies to receive financial relief under the program. Alberta’s compliance cost containment, implemented in 2018.

Alberta requires high-emissions facilities that pollute more than industry standards to comply, either by purchasing emissions credits or offsets from better-performing facilities or by paying into government funds under carbon emission rate, currently 40 C$/ton.

However, the province’s cost containment program eases the financial burden for establishments with compliance costs greater than 3% of their revenue or more than 10% of their profits, to prevent “economic hardship.” economic”.

Alberta’s Department of the Environment has provided, upon request by Reuters, a list of companies benefiting from the program. Spokesman Tom McMillan said it would not disclose the amount of cost reductions the companies received, calling them “commercially sensitive”.

Greenfire Oil and Gas Limited and Athabasca Oil Corp., which operate the second- and eighth-highest emissions oil sands in Alberta, according to government records, also received cost reductions.

The government of Alberta also reduced CNRL’s compliance costs for its Hays gas plant in 2018 and 2019.

The CNRL did not respond when asked about the financial value of the carbon cost reduction it received.

“As we improve technologies to reduce carbon emissions at all of our facilities, we will continue to provide local jobs and economic benefits,” CNRL said in a statement. dad.

Fossil fuel-producing nations face the challenge of cutting emissions without hurting their economies. But Alberta’s policies are “particularly severe” with respect to extending the life of high-emissions facilities, said Dale Marshall, national climate director at Environmental Defense.

Emissions-high intensity, outdated oil facilities pumping-2021-06-28 continues to operate despite government efforts to limit emissions.

Environment Secretary Jason Nixon defends the Alberta effort.

“It’s an Alberta-specific system that works with but not against our key industries.”

Canada is the world’s fourth-largest oil producer, and the oil and gas sector is also the country’s largest emitter. That makes it a key challenge for Prime Minister Justin Trudeau as he aims to cut Canada’s national greenhouse gas emissions by 40-45% by 2030 from 2005 levels.

Reducing carbon cost obligations like the CNRL comes in two ways. First, the Alberta government could allow such facilities to purchase more carbon credits and offsets to meet their obligations than the 60% limit for other facilities. This saves companies money as credits and offsets are often cheaper to obtain than paying a carbon price.

Second, the government can increase the facility’s allowable emissions each year. CNRL, which has a market capitalization of C$65 billion, the highest of any Canadian oil and gas producer, received both forms of relief annually from 2018-2020, the document showed.

“There is always tension around employment concerns, but in this case, I really wonder if getting rid of[the cost reduction program]really results in loss,” said Sara Hastings-Simon. work or not”. , director of the University of Calgary’s sustainable energy development program.

A Keyera Corp-owned natural gas plant, West Fraser Mills pulp facility, and an Enerkem biofuel plant were also bailed out. No companies, other than CNRL, responded to requests for comment.

(1 dollar = 1.2652 Canadian dollars)

(Reporting by Rod Nickel in Winnipeg; Editing by Matthew Lewis) The leading exclusive-emitting oil sands site in Canada collects government relief from pollution payments

Bobby Allyn

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