Canada Oil And Gas Firms May Cut Production To Meet Emissions Cap

Canada Oil And Gas Firms May Cut Production To Meet Emissions Cap - Carbon Herald
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A new report by Deloitte warns that oil and gas companies in Canada might reduce production rather than invest in expensive technology to capture and store CO2 to meet the emissions cap.

The federal government is proposing a cap on greenhouse gas emissions from this industry to reduce its environmental impact.

The report says that companies would need to cut emissions by 20 megatonnes by 2030 to comply with the cap. 

They could achieve this by investing in carbon capture and storage (CCS) technology, but Deloitte says this is too expensive for many firms. A cheaper alternative would be to simply produce less oil and gas.

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The report also highlights potential negative consequences of the emissions cap, including job losses, lower investments, and a decline in economic output (GDP) in Alberta and across Canada. Industries that rely on oil and gas, such as mining, refining, and utilities, could also be impacted.

The report predicts that by 2040, Alberta’s GDP could be 4.5% lower with the emissions cap, while Canada’s GDP could fall by 1%.

The federal government has criticized the report, arguing that it was based on an incomplete picture of the regulations. 

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Environment Minister Steven Guilbeault says the cap is designed to encourage companies to take action on emissions reduction now, not wait until later.

However, Alberta’s Environment Minister Rebecca Shulz believes the report supports the province’s concerns. 

“From a policy perspective, the layering of all of these punitive measures are continuing to drive away the emissions reduction technology that we actually want to see happen here,” Shulz said.

The Deloitte report was commissioned by the Alberta government to study the potential economic effects of the proposed emissions cap.

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