Alberta Government To Make Stronger Regulation Standards for Oil Sands

According to two trustworthy sources, Alberta intends to strengthen its greenhouse gas emission regulations for oil sands operations, eliminating a loophole that rewarded some of Canada’s most polluting operations with exchangeable credits worth millions of dollars.

Alberta’s environment ministry will issue stiffer industry norms, which establish emissions reduction criteria per unit of production, for mines and upgraders as early as this month. According to the sources, Canada’s largest oil-producing province has tightened facility-based emission regulations for industrial sites.

Canadian Natural Resources (CNQ.TO), Suncor Energy (SU.TO), Imperial Oil (IMO) and other companies run oil sands mines that generate significant emissions due to the energy necessary to extract oil from Alberta’s sand and clay.

In the first year of  Premier Jason Kenney’s government, a new emissions regulation regime required mines and upgraders to pay for 700,000 emissions performance credits, even though they created 2.4 million emissions performance credits.

Based on a credit’s current trading value of $32, this amounts to a net profit of $54.4 million (U.S. $42.67 million) for the oil companies.

Oil sands miners were not supposed to receive credits under Alberta’s emissions system, called TIER (Technology Innovation and Emissions Reduction Regulation), two persons with knowledge of the modifications said.

Alberta’s regulations imply that mines and upgrades will no longer be financially rewarded for their emissions when they account for their 2021 performance later this year.

The previous administration’s emissions-reduction strategy was revised by Kenney’s government starting in 2020, which added more flexibility for major emitters like oil sands facilities. Large emitters have the option of measuring their emissions intensity to the prior performance of a facility or against the industry benchmark.

“This is fundamentally the problem, that a facility can show some continuous improvement and gain credits, but still be a high emitter, and be a relatively poor emissions performer from its peers,” said the environmental economist advisor of Alberta’s previous government on managing emissions, Dave Sawyer.

There are two options for charging polluters for carbon pollution: the states can come up with their own system (like Alberta’s TIER) or use the federal system. Ottawa has to approve any system that doesn’t meet the minimum national requirements set by the federal government.

Original source material for this article taken from here