Alberta is pressing ahead with new climate-change regulations, the NDP government said on Tuesday, setting the stage for higher carbon levies on the province's oil and gas industry as it copes with the sharp downturn in commodity prices.
Environment Minister Shannon Phillips said the newly elected New Democratic government would introduce regulations by the end of June, when existing rules aimed at cutting greenhouse gas emissions are set to expire.
The move paves the way for an expected increase in the current $15-a-tonne levy for carbon emissions from major industries, although observers say wider changes to the province's climate strategy are likely some time away.
Some companies have warned about imposing new costs on Alberta's dominant sector at a time of depressed oil prices, though the moves could be welcomed by others as a way to bolster the province's environmental credibility at a time when it seeks new markets for its resources.
A planned overhaul of the province's Specified Gas Emitters Regulation, introduced in 2007, was twice delayed under former Alberta premier Jim Prentice, who is said to have been studying more stringent rules.
"The big decision that the government would have to make would be: Do we keep the Specified Gas Emitters Regulation and that made-in-Alberta approach, which frankly hasn't been well-received by the rest of the world and hasn't been effective at reducing emissions, or do they adopt what others in North America are doing?" said Chris Severson-Baker with the Pembina Institute, an environmental think tank and advocacy group in Calgary. Other jurisdictions have brought in, or are planning, carbon taxes as well as cap-and-trade.
After years of resistance, some of the world's largest oil companies this week called on governments to adopt carbon pricing in order to combat the effects of climate change.
In the oil sands, Suncor Energy Inc. chief executive Steve Williams has signalled support for a "broad-based carbon price," a stand the industry's main lobby group has rejected.
Alberta under Mr. Prentice had planned to roll out a so-called "double-double" plan as part of a full climate framework this month, a government source said. The move would have doubled targets for per-barrel emissions reductions from today's level of 12 per cent and raised the carbon levy to $30 a tonne.
It is unclear whether the NDP under Premier Rachel Notley plans to borrow from work already under way before the May 5 election that saw her party resoundingly defeat the long-ruling Progressive Conservatives.
"I don't think it would be totally out of whack for Ms. Notley to claim that as her own and go with it, because it's just changes to the targets and costs [under the current system]," said Dan Zilnik, president of Calgary consultancy Oil & Gas Sustainability Ltd. "But to come out with a new whiz-bang tax or broaden the scope is highly unlikely."
Alberta is also assessing an accelerated phase-out of coal-fired power and greater interprovincial collaboration with Ontario and Quebec, industry observers say.
Both provinces have expressed reservations about TransCanada Corp.'s Energy East pipeline on environmental grounds, while similar objections have been blamed for halting other major pipeline plans such as Keystone XL and Enbridge Inc.'s Northern Gateway.
With a report from Shawn McCarthy in Ottawa