High-emitting Alberta Oilsands Site Gets Government Help From Pollution Payments

According to a government document obtained by Reuters, Alberta’s government gave three years in a row to Canada’s most emissions-intensive oil sands facility reductions in polluter payments.

Alberta reduced Canadian Natural Resources Ltd.’s costs from 2018 to 2020 to meet provincial emissions requirements. Peace River’s emissions per barrel are triple the oil sands average.

Canadian Natural Resources Limited (CNRL), Canada’s largest oil producer, is one of six companies to receive financial assistance under Alberta’s compliance cost containment programme, which was launched in 2018.

There are two options for high-polluting businesses in Alberta: buy emissions credits or offsets from better-performing ones; or pay into a government fund at the current rate of carbon emissions ($40 per tonne) in order to comply.

According to a province’s cost containment program, facilities whose compliance costs exceed 3% of sales or 10% of profits will receive financial assistance to avoid “economic hardship.”

At Reuters’s request, Alberta’s Environment Department gave a list of companies that received financial assistance from the program. Tom McMillan, the company’s spokesman, said the companies’ cost relief amounts would be kept confidential because they were “commercially sensitive.”

Government records show that Greenfire Oil and Gas Limited and Athabasca Oil Corp., the two Alberta oilsands operators with the second and eighth-highest emissions levels, both experienced cost reductions.

Additionally, in 2018 and 2019, the Alberta government reduced CNRL’s compliance costs at the Hays gas plant.

“As we advance technologies to reduce our carbon footprint at all of our facilities, we will continue providing local jobs and economic benefits,” CNRL said in a statement.

Canada being the world’s fourth-largest oil producer, with oil and gas industry as the largest emitter.

Because of this, Prime Minister Justin Trudeau faces a critical challenge as he seeks to reduce Canada’s national greenhouse gas emissions by 40% to 45% from 2005 levels by 2030.

Two ways to reduce carbon cost obligations

• First, the Alberta government can allow such facilities to buy more carbon credits and offsets to meet their obligations than the 60 per cent limit in place for other facilities. This saves companies money since credits and offsets are typically cheaper to acquire than paying the carbon price.

• Secondly, the government can increase a facility’s allowable emissions per year. CNRL, whose $65 billion market cap is the highest of any Canadian oil and gas producer, received both forms of relief annually from 2018-2020, the document shows.

“There’s always this tension around concern for jobs, but in this case, it’s really questionable to me whether removing (the cost relief program) would actually lead to job loss” said, director of the University of Calgary’s sustainable energy development program, Sara Hastings-Simon.

Keyera Corp.’s natural gas plant, a West Fraser Mills pulp facility and an Enerkem biofuels plant received financial assistance.

Original source material for this article taken from here