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Syncrude‘s oil sands upgrader facility located north of Fort McMurray, Alta. (Kevin Van Paassen/The Globe and Mail)
Syncrude‘s oil sands upgrader facility located north of Fort McMurray, Alta. (Kevin Van Paassen/The Globe and Mail)

Harper’s climate initiative likely still a long way down the road Add to ...

Prime Minister Stephen Harper’s postponement of a long-standing promise to impose climate regulations on the oil and gas sector until he can persuade the U.S. to adopt similar measures could delay action at least three years.

Mr. Harper signalled before Christmas that emissions regulations for the oil and gas sector need to be done “in concert with” the United States, and reiterated that position in a recent interview with Bloomberg News. Alberta Premier Alison Redford has also said Canada cannot afford to move alone on regulations that would impose costs on producers in Canada that are not borne by those in competing jurisdictions in the U.S.

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In a speech Wednesday, former Conservative environment minister Jim Prentice urged Ottawa to proceed on industry regulations only in concert with Washington, saying the U.S. has emerged as a major competitor to the Canadian oil and gas industry.

But Mr. Prentice said it is unlikely such bilateral work can begin before 2017 when the next president takes office.

The Conservative government first promised climate regulations on the fast-growing oil and gas sector in October, 2006, and most recently pledged to introduce draft regulations by last summer. But it has consistently delayed action, even as Environment Canada forecasts the soaring emissions from the oil sands will overwhelm any progress made in other industries over the next two decades.

Mr. Prentice – now vice-chairman at Canadian Imperial Bank of Commerce – echoed oil executives in arguing that onerous regulations on carbon emissions could leave the domestic industry at a competitive disadvantage, even as the United States emerges as a competitor for both investment and markets. “I don’t believe that Canada should pursue an independent path on carbon emissions – a path that would lead to a decline in our ability to compete,” he said. “But We should and we must be prepared to pursue and contribute to a continental solution,” he said.

Mr. Prentice was environment minister when President Barack Obama took office in early 2009. As minister, he pushed for a continental approach to climate regulations, with some success as the U.S. and Canada agreed to joint standards for new-vehicle emissions. But the two governments have not worked together on regulation of major industries, such as coal-fired power producers or the oil and gas sector.

“I believe quite strongly that when we speak of climate change generally or carbon policy specifically, Canada’s action needs to be harmonized with that of the United States on a continental basis because of the degree of economic integration between our countries,” he said in an interview.

However, the CIBC executive said it will be difficult to reach a bilateral agreement in the current U.S. political calendar, with congressional elections this fall and candidates ready to begin campaigning for the 2016 presidential by early next year. He said Canada needs to be ready when the “window opens up” when a new president takes office.

Environmentalists argue that Canada needs to address the growing emissions from the oil sands if it has any hope of meeting Mr. Harper’s commitment, made in Copenhagen in 2009, to reduce greenhouse gas emissions by 17 per cent from 2005 levels by 2020. And they say that Mr. Obama has launched an effort to impose regulations on coal-fired power plants, which are the largest source of emission in the U.S., although the administration faces a major political battle to implement that plan.

Mr. Prentice said the Copenhagen targets are not sacrosanct. “We can’t achieve the Copenhagen targets while damaging the fundamental competitiveness of the country vis-à-vis the United States when our economies are so deeply integrated,” he said in the interview.

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