In a secret deal with four top companies operating in the oil-sands, together with four environmental organizations, the Alberta NDP government climate change plan includes a hard cap on emissions from oil-sands production.
|The new plan represents a breakthrough in that corporations, environmentalists, and the government came to an agreement instead of criticizing each other. However, the plan will no doubt cause divisions within the oil patch, NDP supporters, and environmentalists not part of the deal. When Alberta premier,Rachel Notley, announced the deal:|
Four oilsands leaders — Murray Edwards, the billionaire oil investor and chairman of Canadian Natural Resources Ltd.; Steve Williams, president and CEO of Suncor Energy Inc.; Lorraine Mitchelmore, president of Shell Canada; Brian Ferguson, president and CEO of Cenovus Energy Inc. — stood behind Notley Nov. 22 as she announced an aggressive climate change plan for Alberta. In addition to imposing a $3-billion a year economy-wide carbon tax and phasing out coal-fired electricity generation, the plan strictly caps the oilsands’ share of provincial emissions at 100 megatonnes per year, from about 70 megatonnes today.The plan will be part of Canada's offering for the UN climate change conference taking place in Paris. Notley said:
“I’m hopeful that these policies, taken overall, will lead to a new collaborative conversation about Canada’s energy infrastructure on its merits, and to a significant de-escalation of conflict worldwide about the Alberta oilsands."
“In my opinion, there is no circumstance in which greens should be negotiating with tarsands operators, and I don’t think that in the current political context any green group could seriously believe they could get away with that again. The grassroots resistance is too strong."
"What I see from this policy, as we've read it, is that Alberta is going push capital towards efficiency. Whether it's a company, a reservoir or a technology. We are going to tip the scales so that capital flows away from the least efficient reservoirs, companies, technologies."
Tombe estimates (there are no details yet for the subsidy) that the average return to oilsands operators will be $1.50 per barrel, which will mean the most efficient operators, such as Cenovus and Devon, will pay little to no carbon tax in the early years and may even earn credits that they can sell. At the other end of the scale, Shell in Peace River and Nexen at Long Lake will pay quite a bit more, as much as $5 a barrel in the case of Nexen.