Lobby Group Warns Emissions Cap Could Lead to $75B Loss in Oil and Gas Sector Investments
An oil and gas lobby group warns that the federal government’s proposed emissions cap on the sector, along with its stringent targets for methane reduction, could lead to a reduction of Canada’s non-oilsands fossil fuel production by one million barrels per day by 2030.
The Canadian Association of Petroleum Producers reveals that they commissioned a study by S&P Global Commodity Insights to assess the economic impact of various proposed emissions-reducing policies on Canada’s conventional oil and gas producers.
According to the study, if oil and gas companies are mandated to cut greenhouse gas emissions by 40 percent by 2030, the industry could face a $75 billion decrease in capital investment over the next nine years compared to current policy conditions.
CAPP explains that this could result in one million barrels of oil equivalent lower production per day in 2030 compared to current projections, and 51,000 fewer jobs by 2030 than what existing government policies allow for.
Under the federal government’s draft framework for its promised emissions cap on oil and gas production, the sector would need to reduce greenhouse gas emissions by 35 to 38 percent from 2019 levels by 2030. The sector could also choose to purchase offset credits or contribute to a decarbonization fund to lower the requirement to just a 20 to 23 percent reduction.
However, CAPP’s study also considers the potential impact of the federal government’s draft methane regulations, which aim for a minimum 75 percent reduction in oil and gas methane emissions below 2012 levels by 2030.
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