Lobby group says emissions cap would cost oil and gas sector $75B in lost investment

By The Canadian Press on May 27, 2024.

CALGARY – An oil and gas lobby group says the federal government’s proposed emissions cap on the sector combined with its stringent targets for methane reduction could reduce Canada’s non-oilsands fossil fuel production by one million barrels per day by 2030.

The Canadian Association of Petroleum Producers says it commissioned a study by S&P Global Commodity Insights to see what the economic impact of various proposed emissions-reducing policies would be on Canada’s conventional, or non-oilsands, oil and gas producers.

The study says in the event that oil and gas drillers could be required to cut greenhouse gas emissions by 40 per cent by 2030, the industry could see $75 billion less in capital investment over the course of the next nine years compared with current policy conditions.

CAPP says that would translate to one million barrels of oil equivalent lower production per day in 2030 compared with current forecasts, and 51,000 fewer jobs by 2030 than under existing government policies.

Under the federal government’s draft framework for its promised cap on emissions from oil and gas production, the sector would have to cut greenhouse gas emissions by 35 to 38 per cent from 2019 levels by 2030. The sector would also have the option to buy offset credits or contribute to a decarbonization fund that would lower that requirement to cutting just 20 to 23 per cent.

But CAPP says its sponsored study also added in the projected impact of the federal government’s draft methane regulations, which would require at least a 75 per cent reduction of oil and gas methane emissions below 2012 levels by 2030.

This report by The Canadian Press was first published May 27, 2024.

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