Alberta's new emissions levy costly — Canadian energy industry
Canada’s oil and gas sector is not pleased with the province of Alberta's new plan to reduce greenhouse gas emissions and raise corporate taxes, as they consider the ruling quite costly for the industry, especially in the current environment of weak prices.
The move by Alberta, the heart and soul of Canada’s oil sands industry, aims to improve its image by showing it is committed to be a more responsible oil producer.
The announcement, however, comes at a difficult time for the province’s energy industry, which already has left thousands out of jobs and shelved expansion plans across the oil patch, as a result of dropping crude prices.
Tim McMillan, president of the Canadian Association of Petroleum Producers, told CBC News he appreciated the phasing in of higher costs for greenhouse gas emissions. “But combined with higher corporate taxes, the industry is set to lose $800 million over the next two years,” he warned.
Environment minister Shannon Phillips, a former activist who recently took over the provincial legislature, argues that tougher regulations are needed to show Alberta is climate change leader.
“If Alberta wants better access to world markets (for its oil), then we are going to need to do our part to address one of the world’s biggest problems, which is climate change,” she told reporters on Thursday. “Nobody knows this better than the people who work in our energy industry.”
Phillips added that by 2017, large emitters will have to reduce the intensity of greenhouse gases by 20%, while carbon levies will double from $15 a tonne to $30 a tonne.
The province’s regulations currently price carbon at an effective rate of about $2 a tonne. The new rules will increase that cost to roughly $6 by 2017. By then, Alberta expects that the fresh regulations to have reduced greenhouse-gas emissions by 13 megatonnes a year. Under existing rules, an 8-megatonne reduction had been expected.