Page 11 - NorthAmOil Annual Review 2021
P. 11

NorthAmOil                                        APRIL                                          NorthAmOil


                                                                                                  The hike in the carbon
                                                                                                  tax over the coming
                                                                                                  years has implications
                                                                                                  for oil sands producers,
                                                                                                  who have been trying
                                                                                                  to bring down their
                                                                                                  emissions intensity.






























                         pandemic’s impact, Trudeau had committed to  pipeline, the two North American leaders have
                         reducing Canada’s emissions by 124mn tonnes  already started working to deepen their coun-
                         from 2005 levels by the end of 2020 but was  tries’ co-operation on climate change issues.
                         estimated to have only achieved around 1mn  This is a significant turnaround from former US
                         tonnes of actual reductions.         President Donald Trump, who showed no con-
                           Following these failures, he is attempting to  cern over climate change and took the US out of
                         turn Canada’s performance on decarbonisation  the Paris climate agreement – though Biden has
                         around. Indeed, the plans to hike the carbon tax  since returned his country to the accord.
                         to CAD170 per tonne by 2030 comprise one   Given the anticipated impact of the carbon
                         of the world’s most aggressive carbon-pricing  tax on provinces and certain industries, Trudeau
                         regimes.                             can expect to encounter further resistance to his
                           Canada has now committed to reducing its  plans. Indeed, Alberta Premier Jason Kenney
                         GHG emissions by 30% compared with 2005  said in March that his province would “continue
                         levels by 2030, and when the government  to fight to defend our exclusive provincial power
                         unveiled its net-zero plans in December, it said  to regulate our resource industries”.
                         it would exceed this target.          Alberta’s opposition comes as no surprise
                           Give the country’s past track record, scep-  given  that  the  province  contains  Canada’s   Investments
                         ticism over how realistic these targets are is  giant oil sands resources, which have become
                         understandable. However, Trudeau appears  renowned for being emissions-intensive. Oil   in abatement
                         increasingly determined to make decarbonisa-  sands producers have been working to bring   options such as
                         tion a priority – though it is worth noting that  down the emissions intensity, and it is possi-
                         future governments may have a different posi-  ble that the rising carbon tax could help spur   carbon capture
                         tion. Indeed, the opposition Conservative Party  these efforts. Investments in abatement options
                         has vowed to scrap national carbon pricing if it  such as carbon capture and storage (CCS) are  and storage (CCS)
                         is voted into government. Earlier this month  anticipated. Under the carbon tax legislation,
                         members of the party voted against adding  the alternative to paying the tax for industrial   are anticipated.
                         green policies to its agenda, or language saying  is buying credits to offset emissions from those
                         that climate change is real.         who are doing better to reduce their own. Either
                                                              way, the tax looks set to increase the cost burden
                         What next?                           on oil sands producers, who have already been
                         Trudeau’s efforts will also likely be bolstered by  hit hard by the collapse in oil prices since 2014.
                         the recent election of US President Joe Biden,   And despite opposition to the federal carbon
                         who has already signalled a strong commitment  tax from Alberta and others, the Supreme Court
                         to combatting climate change since he took office  ruling means the hikes are constitutional and
                         in January.                          can no longer be stopped while a Liberal gov-
                           Though US-Canadian relations took a hit  ernment is in power. Opponents to the plans
                         thanks to Biden’s immediate move to revoke  will have to turn their attention to how best to
                         the cross-border permit for the Keystone XL oil  manage the tax hikes over the coming years.™



       Annual Review 2021                       www. NEWSBASE .com                                             P11
   6   7   8   9   10   11   12   13   14   15   16