Boom may be over soon

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Federal green plan could 'crush' oilsands
Energy giants warn targets may kill growth
Lisa Schmidt and Renata D'Aliesio; With files from Shaun, Calgary Herald
' M) _& o# q, |! H4 CPublished: Thursday, April 26, 2007
On the eve of a federal clampdown on industrial greenhouse gases, energy executives warned it could scare off new investment in

' U' ]' K- p' H# O) X2 cAlberta's oilsands, while the province vowed to protect its own interests.

The federal government releases its new climate change plan in Toronto today, laying out reduction targets for the country's biggest producers of emissions linked to global warming.
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Font: ****Speaking at annual meetings in Calgary on Wednesday, the heads of two major oilsands producers -- EnCana Corp. and Canadian Oil Sands Trust -- cautioned that a carbon tax could be the "choke" point for an industry already weighing returns against rising costs.
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# j: H9 ^) C+ D6 U"There will be a point where you start shutting down new project development," said Randy Eresman, EnCana's chief executive.

"If they suggest that we need to go to absolute carbon caps, they crush this industry by taking future growth away," added Marcel Coutu, chief executive of Canadian Oil Sands Trust, the biggest partner in the Syncrude oilsands project.
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Alberta's senior federal minister, Jim Prentice, will meet this afternoon with a group of energy executives in Calgary to explain the Conservatives' climate change plan, parts of which leaked out Tuesday.

Measures include halting emission increases within five years. By 2020, the federal government expects to reduce greenhouse gases by 20 per cent from today's level.

/ R. j1 U( b) _7 o# I6 L/ M! aBut if the target is achieved, it would still place Canada behind its commitment under the Kyoto accord to cut emissions to six per cent below 1990s mark by 2012.
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  t+ R6 f1 Z/ b, h* }2 ["We are making up for 10 long years when harmful greenhouse gases went up and did not go down," federal Environment Minister John Baird told the House of Commons. "We are making up for 10 years when all there was was talk, talk, talk."
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While a clearer picture of the Tory plan emerges today, political and environmental critics contend the snapshot painted in Baird's leaked speech doesn't go far enough. To be on track to avert disastrous effects of global warming, Canada needs to fulfill Kyoto and then go much farther, said Matthew Bramley of the Pembina Institute.

"We know from the science to prevent catastrophic climate impacts, the industrialized world as a whole needs to be reducing emissions by over 80 per cent below 1990 levels by 2050," he said, arguing the cost of meeting Kyoto's absolute reduction target is doable -- about $1 per barrel of oil, according to Pembina.

! P  b% i( Z9 \& T8 B5 wBut Alberta Environment Minister Rob Renner said the economic toll in the short-term would be too great.

; v! x7 y5 p# K8 bLast month, the provincial government announced its own plan to regulate the "intensity" of industrial greenhouse gas emissions. The proposed rule, set to take effect in July, would curb the amount of energy used to produce each oil barrel by 12 per cent, but would not stop Alberta's emissions from growing.
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Industries failing to meet the target must pay $15 per tonne of carbon dioxide. The new emission rules come as oilsands production is slated to triple by 2015.
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1 B, Y& K6 J9 E5 f7 H"We have to ensure we don't jeopardize the competitiveness of our industry, nor do we put in place a regime that would see dollars that should be invested in Alberta . . . move elsewhere, either out of Alberta or elsewhere in the world," Renner said.


- P- S0 }2 Z: e6 S. i: n$ x- VToday's details could set the stage for a showdown between the energy-rich province and Ottawa. But federal Natural Resources Minister Gary Lunn discounted that possibility.

: t8 D- R4 P4 V- B% j2 F"It's very, very important that that doesn't happen," he told the Herald. "Nobody is interested in that. We are interested in reducing greenhouse gases, so if the province brings in regulations that do that, that's great because that's what our goal is and the industry we'll see that level of co-operation."
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+ @: R, z8 b! J5 h' l  f; TLunn wasn't as optimistic: "The whole development is driven by a number of factors," he said.

; F  g. Q. ~! y. U5 C& z" ?"We know we've got a very over-heated market. We know we've got somewhere over $100 billion in committed projects in the next 10 years, and so we'll have to wait and see."
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© The Calgary Herald 2007

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