Rod Nickel

WINNIPEG, Manitoba (Reuters] – The government of Alberta has granted Canada the most polluting oil sands facilities reductions for three consecutive years. These payments are necessary to offset higher emission levels than other industries. A government document shows.

Alberta lowered Canadian Natural Resources Ltd (NYSE:) Resources Ltd (CNRL) oil-producing Peace River location costs in order to meet provincial emission requirements. Peace River’s oil-sands emissions per barrel are three times that of an already high average.

CNRL Canada’s top oil producer made C$2.1 billion (1.66 billion) adjusted profit for the third quarter. This is just one of six companies eligible to get financial relief from Alberta’s compliance cost control program. The program was launched in 2018.

Alberta’s high-emitting facilities must comply. They can do this by purchasing emissions credits or compensating from facilities with better performance or paying into a government fund at C$40 per ton.

To prevent economic hardship, however, the provincial cost containment program reduces the financial burden for facilities that have compliance costs exceeding 3% of sales.

Reuters asked Alberta’s Environment Department to provide a list listing the recipients of the program. Tom McMillan, a spokesperson for the Environment Department of Alberta said that it wouldn’t disclose the amount of cost relief received by companies and called them “commercially sensitive”.

According to records from government, Greenfire Oil and Gas Limited and Athabasca Oil Corp were the sites that produce the most oil sands emissions in Alberta. They also got cost cuts.

The compliance costs for Hays gas station in Alberta by CNRL were also reduced by the government of Alberta between 2018 and 2019.

When CNRL was asked about the value of carbon cost relief, it did not reply.

“We will keep providing jobs in the local area as we develop technologies to lower our carbon footprint at all our facilities,” CNRL stated in a statement.

Emissions reduction is a challenge for countries that use fossil fuels. Dale Marshall, Environmental Defence’s national climate manager, says Alberta’s policy is “particularly egregious” because it prolongs the lifespan of highly-emitting plants.

Emissions-intense, outdated oil facilities https://www.reuters.com/business/energy/old-small-co2-intense-why-canadas-highest-carbon-oil-sites-keep-pumping-2021-06-28 continue to operate despite government attempts to curb emissions.

Jason Nixon, Alberta’s Environment Minister, has defended Alberta’s efforts.

“It’s a Made-For-Alberta System that Works with and Not Against Our Key Industries”

Canada is fourth in the world for oil production, and its oil and gas industry is also the nation’s largest emitter. It is a significant challenge for Justin Trudeau who wants to reduce Canada’s emissions of greenhouse gases by 40%-45% in 2030, compared with 2005.

There are two methods to reduce carbon costs obligations such as CNRL. The first is that the Alberta government may allow these facilities to purchase more carbon credits or offsets in order to fulfill their obligations. This allows them to exceed the 60 percent limit for facilities elsewhere. Credits and offsets can be cheaper than buying carbon prices, which is a cost-saving measure for companies.

Second, the government may increase the facility’s annual allowable emissions. The document shows that CNRL’s market capital of C$65 Billion is among the largest Canadian oil and natural gas producers. It received both types of relief from 2018 to 2020.

Sara Hastings Simon (director of University of Calgary’s Sustainable Energy Development program), stated, “There is always this tension about concern for jobs. But in this case it’s really questionable whether removing [the cost relief] would actually lead to loss of job.”

Keyera Corp provided relief to a plant that was owned by West Fraser Mills, West Fraser Mills’ pulp plant, and Enerkem Biofuels Plant. None of the other companies except CNRL responded to inquiries for comment.

($1 = 1.2652 Canadian dollars)