Energy NL opposes federal emissions cap, citing serious impact and concerns
Energy NL has made a submission to the Government of Canada Gazette 1 consultation process on the proposed Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations and has asked the federal government to abandon the regulations. According to the submission, the regulations sidestep the Atlantic Accord and will effectively cap offshore oil production and greatly impact the Canadian oil and gas industry, the Newfoundland and Labrador offshore oil and gas industry, Energy NL members, Newfoundlanders and Labradorians, and all Canadians.
“The approach taken by the Government of Canada with these emissions cap regulations will in practice function as a cap on production, resulting in a cap on jobs, a cap on revenue and royalties, and a cap on supplying lower-carbon oil to meet global demand,” said Jeremy Whittle, Chair of the Energy NL Board of Directors. “Any action that may lead to a curtailing of existing production or that discourages investment in new production is not acceptable to Energy NL.”
Energy NL obtained the assistance of Wood Mackenzie, a world leading global data and analytics solutions provider for renewables, energy, and natural resources, to understand the complex and convoluted regulations and their impacts on the Newfoundland and Labrador offshore oil and gas industry.
Modelling by Wood Mackenzie suggests that to meet post-exemption emissions cap targets, operators would need to consider deferring start-ups or developing smaller projects phases (i.e., develop with less robust economics). In an already volatile commodity business, this places development potential at serious risk by creating investment decision paralysis and freezing out investment.
“Energy NL has heard from industry members locally, nationally, and internationally that the regulatory burden of Canada is substantial, and the proposed emissions cap does nothing to alleviate this burden,” said Charlene Johnson, CEO of Energy NL. “Rather, this complex and convoluted cap exacerbates the regulatory burden and will undoubtedly send potential investment to other jurisdictions, likely with higher emitting oil and less stringent ESG practices."
"The federal government should be working collaboratively to bring governments, our economic sectors, and industry leaders together and incentivize the lowering of emissions. That will not happen through the Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations. Every Canadian deserves better than this approach,” Johnson concluded
Energy NL’s submission to the Government of Canada on the Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations can be found here.
