The federal government has outlined two options to help cut emissions from the oil and gas sector by about 40% by the end of this decade. Environmental Minister Steven Guilbeault released a discussion document on Monday that includes the two possibilities.
Talks will look at either a modified carbon pricing system or an industry-specific cap-and-trade system to set a ceiling. The Government of Canada expects to outline the design of the oil and gas emissions cap early next year, ahead of the next steps to implement the cap.
A media release explained that core to either approach is the goal of lowering emissions at a pace and scale needed to achieve net-zero emissions by 2050 and make a meaningful contribution toward Canada's 2030 emission reduction target. Also core to either approach is supporting investments in clean technologies to decarbonize the sector and create good, sustainable jobs. Canada is aiming to cut emissions across all sectors 40 to 45 per cent from 2005 levels by 2030.
The Government of Canada also said it planned to work closely with provinces and territories, Indigenous groups, the oil and gas sector, and other stakeholders to provide certainty for industry and Canadians, while remaining attuned to evolving energy security considerations, and maximizing opportunities for ongoing investment in the sector. The release stated with record profits in the oil and gas sector, now is the time to work collaboratively on the path forward to ensure clean air, long-term economic success, and good jobs that will serve Canadians for generations to come.
"Establishing a cap on oil and gas emissions is one of the key commitments of our Government's Emissions Reduction Plan. Canada's oil and gas companies have proven repeatedly that they can innovate and develop new technologies and more competitive business models. True global energy security and affordability can only come with reduced emissions. With this cap, we will work with industry, provinces, Indigenous groups, civil society, and others to take action on drawing down the emissions from oil and gas production," said Steven Guilbeault, Minister of Environment and Climate Change.
"Climate change is one of the greatest challenges of our time, but it also presents us with significant opportunities for innovation. The demand for oil and gas in a net-zero economy will be entirely focused on those jurisdictions which can produce oil and gas with increasingly lower and ultimately near-zero production emissions. That's why we will work closely with the oil and gas industry to lower emissions from Canada's oil and gas industry at a pace and scale that is compatible with a net-zero world," said Jonathan Wilkinson, Minister of Natural Resources.
In 2020, the oil and gas sector produced 27 percent of Canada's greenhouse gas emissions.