2030 Emissions Reduction Plan
In March 2022, the Canadian federal government presented the 2030 Emissions Reduction Plan, a mix of government policies and funding intended to meet GHG reduction targets and achieve carbon net-zero by 2050. The Plan is expected to be finalized early in 2023, and comments are due on September 30 regarding draft regulations.
The 271-page Plan covers a spectrum of industries (buildings, finance, jobs, transportation, agriculture, clean fuels, electricity, and more), and aims for 2030 emissions to be 40% lower than 2005 levels while also maintaining a vibrant, strong economy.
New Regulations
Among other things, the plan includes:
- Oil and gas GHG emissions reduction of 42% of 2019 levels.
- New measures to reduce oil and gas methane emissions by at least 75% below 2012 levels by 2030, with strengthened regulations to meet the target to be introduced in early 2023.
- New CCUS investment tax credit.
- Phase-out of public financing for oil and gas, including by federal Crown corporations.
- Creation of a new Futures Fund for Alberta, Saskatchewan, and Newfoundland, and Labrador to support local and regional economic diversification.
- Establishing a new Clean Jobs Training Centre to help workers across sectors upgrade or gain new skills to be on the leading edge of the zero-carbon industry.
The plans models show oil and gas emissions would have to be reduced (from 2019 levels) by 42% to achieve the stated reduction targets, and likely could only be achieved with significant production cuts. These precipitous reductions would be accomplished by imposing caps on greenhouse gas emissions in the oil and gas sector.
The positive impact of reducing fugitive emissions, especially methane, is documented – methane holds over 80 times the atmospheric heat of CO2. However, the issue of emissions reduction must be considered and addressed globally, not just at the point of Canadian production.
Oil & Gas Impact
For Canada, the economic damage of production cuts would be immediate, and the environmental benefits transitory, as oil and gas is imported from abroad to compensate for the Canadian energy shortfall.
Fugitive emissions reduction is an international issue: Policies that inhibit Canadian energy production will simply push oil and gas production to other countries, the majority of which have wholly unregulated emissions and few, if any, environmental safeguards.
While methane emissions can be effectively reduced by engineering and equipment changes in natural gas and conventional extraction operations, CCUS technology is not yet fully developed, and cannot be implemented at scale. Canada already has robust rules in place for fugitive well emissions, and the federal government can work with the provinces to balance the economy, emissions costs, and climate protection concerns.
Canadian Energy
Canada’s oil and gas industry is the lifeblood of many Canadian communities and regions, supporting 593,500 direct and indirect jobs across Canada. Rather than punitive restrictions or production cuts, Canada should incentivize investment in Canadian Energy and seek emissions reduction progress that does not compromise energy security, the economy, or the global environment.
Closing the gap between ambitious reduction goals and the realities of technological solutions will require the federal government to cooperate with the industry and energy producing provinces in crafting and adjusting policies. Realistic measures to address emissions will lead to long-term economic benefits while meeting national and international energy demand and achieving climate goals.
