Alberta's top energy regulator was not consulted about a provincial plan to cap oil sands emissions, raising questions about how the signature climate policy will be implemented.
NDP Premier Rachel Notley unveiled the measure last month as part of a sweeping strategy aimed at slowing growth in climate-warming greenhouse gases and blunting opposition to stalled oil sands pipelines.
It emerged from negotiations with top executives at Suncor Energy Inc., Royal Dutch Shell PLC, Cenovus Energy Inc. and Canadian Natural Resources Ltd.
Under the policy, oil sands emissions would be capped at 100 million tonnes a year. They are about 70 million tonnes currently, leaving some room to expand. There is also an allotment for projects that use co-generation and an unspecified provision for bitumen processing.
But the Alberta Energy Regulator, the watchdog tasked with enforcing the limits, was not consulted on the plan and says key details must still be hashed out.
Among the biggest is how the 30-million-tonne allowance for growth would be divvied up as companies jostle for new approvals, said Jim Ellis, president of the AER.
One option is to green-light new projects on a first-come, first-served basis, he said, but added: "I'm not sure that's the right way to do business.
"We're going to have to sit down with the government and have that discussion, because as a regulator we don't pick winners and losers."
Complicating matters, the regulator has already approved projects with emissions levels that collectively could blow through the new cap, raising questions about whether existing permits would be revoked.
The agency has approved as much as 2.1 million barrels a day of new growth, according to figures from the Pembina Institute.
Some of that capacity has been squelched by the collapse in U.S. and global oil prices, but the figure is nearly double the level analysts say would be permitted under the cap without technological breakthroughs.
"I think the price of oil alone has recalibrated what that growth scenario looks like, somewhat," said Chris Severson-Baker, Alberta director with the Calgary-based policy group.
"But definitely this limit on emissions would crimp the approved projects significantly unless there's a significant improvement in technology."
The moves have drawn mixed support. Large competitors with major oil sands stakes, such as ConocoPhillips Co., BP PLC, Husky Energy Inc., Devon Energy Corp. and Imperial Oil Ltd., have stayed on the sidelines.
It is also unclear whether the cap will cool opposition to major pipeline proposals, such as Enbridge Inc.'s $7.9-billion Northern Gateway or TransCanada Corp.'s $12-billion Energy East, that are designed to ship oil sands crude to richer global markets.
Environmentalists involved in the discussions insist no grand bargain is at play, noting Alberta's emissions are still forecast to grow between now and 2030. But they also acknowledge that the province's new strategy will change the narrative around the oil sands.
Tim Gray, executive director of Environmental Defence, said the NDP was cognizant of Ontario's experience with cancelled gas plants and very concerned about the prospect of liabilities and compensation claims that might arise if the cap was set any lower, forcing projects under construction to be abandoned.
Mr. Gray said the Alberta plan leaves some crucial questions unanswered, including how the country will meet emission-reduction targets while the province's emissions continue to rise for at least a decade.
"We're not exactly wild about the fact that [oil sands] emissions are going up to 100 megatonnes," said Mr. Gray, who joined Ms. Notley on the stage for the announcement on Nov. 22. "But it changes the narrative about Alberta, and we have to acknowledge that."