The Challenge with Canada's Proposed Oil and Gas Emissions Cap

Nov 19, 2024

Sander Duncanson, a Partner at Osler and an expert in Canadian business law and carbon policy, dives into Canada's proposed oil and gas emissions cap. He discusses the potential for market distortions and unintended consequences of the regulation. The duo addresses concerns about Canada's more stringent policies compared to the U.S., which may lead to investment flight. Lastly, the complexities of the regulatory framework and its impact on investment and competitiveness within the sector are also explored.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Divergent Energy Policies

The Canadian and US approaches to energy policy are diverging significantly, impacting cross-border investments.
This policy gap affects traditional and clean energy, potentially requiring adjustments in the next year.

INSIGHT

Uncertainty Around the Regulation

The proposed oil and gas emissions cap regulation's likelihood of becoming law is uncertain, reflected in the muted stock market response.
The timing of its release, close to the US election, might have contributed to this uncertainty.

ADVICE

File a Notice of Objection

Concerned individuals can file a Notice of Objection against the proposed regulation within 60 days.
This notice, different from a comment letter, can trigger a public inquiry, potentially delaying the regulation.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

On November 9th, 2024, the Canadian Government published a proposed policy to cap oil and gas sector emissions, known as Canada Gazette Part 1. While the final targets will not be set until 2026, the Government estimates that this policy, in conjunction with other policies, will reduce GHG emissions from the oil and gas sector by 35% in the early 2030s compared to 2019. When flexible compliance options are considered, actual emissions are targeted to decline by 19% from 2019 levels.

This week, Sander Duncanson, Partner at Osler and Co-Chair of Osler's national Regulatory, Indigenous, and Environmental practice, joins the podcast. Osler is a leader in Canadian business law.

Peter, Jackie and Sander discuss their concerns with the proposed policy. Topics covered include:

The low likelihood of the regulation becoming final law.
The potential for the policy to create winners and losers, market distortions, and other unintended consequences.
The complexity of Canada’s regulatory framework which reduces investment.
Concerns that Canada and the United States are moving in opposite directions regarding carbon policy. Canada is increasing stringency, while the US is expected to reduce its carbon policy, thereby creating the threat of investment moving from Canada to the US (carbon leakage).
The options to provide feedback on the proposed policy are available until January 8th, 2025.

Content referenced in this podcast:

Canada Gazette, Part I, Volume 158, Number 45: Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations (November 9th, 2024)
- Consultation feedback can be provided within a series of online forms in the Gazette, Part 1 link above, by January 8th, 2025. Another option for feedback is to submit a “Notice of Objection” by the same date. More information on this option can be found under the heading “PROPOSED REGULATORY TEXT” in the Gazette.
Peter Tertzakian’s commentary in The Hub “DeepDive: It’s time for a carbon policy time-out” (November 2nd, 2024)
Osler’s Blog “Federal government announces constitutionally questionable oil and gas sector emissions cap” (November 8th, 2024)

Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

Check us out on social media:

X (Twitter): @arcenergyinst
LinkedIn: @ARC Energy Research Institute

Subscribe to ARC Energy Ideas Podcast
Apple Podcasts
Amazon Music
Spotify