Copyright of the Daily Oil Bulletin 2018
Alberta Reducing Emissions, Moves Forward On CLP: Progress Report
This year will bring important milestones for Alberta’s Climate Leadership Plan (CLP), including regulations that fulfill the government’s promise to limit emissions from the oilsands at 100 megatonnes of carbon dioxide equivalent, according to a newly-released CLP progress report for 2016-17.
Covering 2016 and preliminary results for a few initiatives in 2017, the progress report aims to provide Albertans with an update on actions taken and gains made towards achieving CLP goals (DOB, Nov. 22, 2015).
Across the entire economy, in 2014 Alberta’s reported emissions totalled 274 Mt CO2e. With CLP, forecasted results for 2030 are now 254 Mt (compared to 293 Mt without CLP), and that amount could drop to 222 Mt by 2030 with improvements from innovation.
Reductions in the energy sector’s methane emissions, as well as reduced electricity sector emissions, leads this downward trend, which large investment decisions in response to carbon competitiveness incentives, carbon prices up to $50 in 2022, as well as the expiry of the carbon levy exemption for upstream oil and gas will compliment.
For the oilsands and other components of the oil and gas industry, reported emissions for 2015 totalled 132 Mt. With CLP policy and economic expectations in 2017, the province now forecasts emissions from this sector to be 145 Mt by 2030, which is 26 Mt less than without the CLP (according to 2014 Government of Canada emissions trends).
In terms of policy and legislation, the province is currently considering the Oil Sands Advisory Group (OSAG)’s advice on implementation of the emissions cap (DOB, June 16, 2017). Actions for 2017-18 include expert workshops and preliminary sessions to identify and develop policy options reflective of recommendations.
A key focus in terms of clean technology development for Emissions Reduction Alberta (ERA) is reducing the oilsands greenhouse-gas (GHG) footprint in terms of fossil fuel supply, and as of 2016 the ERA had committed $122 million in this area to offer technologies that reduce emissions long-term and maximize resource value.
The CLP progress report suggests there are currently 34 such projects, valued at $631 million, representing estimated cumulative reductions of 1.3 Mt by 2020 and 3.3 Mt by 2030.
In 2017-18, the ERA has funded 11 more projects as part of its Methane Challenge, including two oilsands-focused projects. Estimated total project value is $59 million. Further, the ERA launched a $50 million innovation challenge for the oilsands, seeking technologies to reduce GHG emissions while lowering bitumen production and processing costs. The ERA has shortlisted and invited certain interested parties to submit full proposals on that front.
Covering more emissions with CLP
Under the Specified Gas Emitters Regulation (SGER), results from 2011 through 2016 indicate Alberta applied a carbon price to about 45 per cent of total emissions throughout the economy. With implementation of the carbon levy early in 2017, the amount of emissions covered by carbon price rose to 60 per cent last year and 70 per cent this year.
Initially, Alberta’s carbon tax was $20 per tonne of CO2 equvalent, and this year it increased to $30 per tonne.
The province’s approach to pricing large industry emitters is transitioning in early 2018 from a facility-specific one under SGER to an output- or- product-based approach.
Further legislative initiatives underway in support of CLP include developing and enhancing regulatory standards for methane emissions reporting, leak detection and repair requirements for new and existing facilities.
On its methane file, 2017-18 actions and next steps include engaging stakeholders on draft requirements through the Alberta Energy Regulator’s (AER) public feedback process, revising and releasing directives by mid-2018 for phase-in between 2019 and 2023, as well as continuing work on enhancing existing directives, studies in partnership with other organizations, economic modelling to assess regulatory impacts, and work in other areas of methane management.
Also, the province continues enshrining into law its commitment to phase out emissions from coal-fired electricity by 2030, as well as strengthening commitments of government and coal companies in the Off-Coal Agreement.
Indigenous oilsands emissions cap engagement
Currently, the government is gathering feedback on OSAG’s recommendations regarding the 100 Mt oilsands emissions limit implementation, ensuring First Nations and Métis peoples in the area have knowledge and context needed to express interests and concerns surrounding the emissions limit.
Opportunities to partake in this engagement include an information-sharing session generally introducing current information on oilsands production, a summary of OSAG’s recommendations on the cap, as well as potential impact to Indigenous communities. Community members can also provide feedback on OSAG’s recommendations.
The advisory group specifically recommended the province consult Indigenous communities on recommendations.