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Canada continues to delay release of oil sands emission rules

David Ljunggren
Thursday, 28 Nov 2013 | 2:01 PM ET

OTTAWA, Nov 28 (Reuters) - Canada is not ready to unveil already long-delayed rules on curbing greenhouse gas emissions from the Alberta oil sands, the environment minister said on Thursday in comments that could boost U.S. resistance to the proposed Keystone XL pipeline.

The right-leaning Conservative government, which has close ties to the energy-rich western province of Alberta, has repeatedly delayed the release of proposed regulations to tackle soaring emissions from the oil and gas sector.

"It is at this time for me premature to say when they will be ready. There has been good progress in that area over the last few years," Environment Minister Leona Aglukkaq told the House of Commons environment committee.

Asked whether the rules might be released this year, she replied: "I can't give you a timeline but work continues."

Peter Kent, Aglukkaq's predecessor as environment minister, said in February that Ottawa was "very close" to finalizing the rules. Work on the regulations, which started in 2008, involves the federal government and the governments of Canada's 10 provinces.

U.S. President Barack Obama, who must decide whether to approve TransCanada Corp's proposed Keystone XL pipeline from the Alberta oil sands to the U.S. Gulf Coast, said in July that Canada could be doing more to curb emissions.

Some politicians in Canada took his remarks as a hint that the President wants to see the Canadian regulations before making a decision on Keystone next year. Green groups want Obama to veto the pipeline, which they say would speed up development of the oil sands and cause Canadian emissions to jump even more.

"If Keystone doesn't occur then there will be a whole ripple effect throughout the industry and it's largely determined by the fact that we have no greenhouse-gas emission regulations," opposition legislator John McKay told Aglukkaq at the committee.

"And so it's a little late in the day to say 'Well we're going to continue to work with our provincial partners'," said McKay, who belongs to the Liberal Party.

Canada acknowledged last month it would miss its target for reducing greenhouse gas emissions by a wider margin than expected unless it takes further action to offset oil industry emissions.

Canada has committed to cutting its greenhouse gas emissions to 17 percent below 2005 levels by 2020. Yet the figures released in October showed it would produce 734 megatonnes of greenhouse gases in 2020, or 122 megatonnes above its promised target.

This month the Pembina Institute released correspondence between the Alberta government and the Canadian Association of Petroleum Producers (CAPP) that showed the lobby group opposed the idea of tougher emissions regulations.

"Will higher stringency requirements impact production and revenue? Very likely," CAPP said in one document, obtained by Pembina under Alberta's freedom of information legislation.

Alberta charges C$15 ($14) per tonne for carbon emissions above permitted limits and puts the money into a technology fund. Earlier this year media reports said the province was mulling raising that levy to C$40, but nothing came of the idea.

Asked about apparent industry resistance to tougher rules, Aglukkaq told reporters after her committee appearance that "industry wants to do the right thing... They want to be good environmental stewards".