Saskatchewan Joins Anti-Emissions Cap Voices

The Saskatchewan government has joined the chorus of voices opposing Canada's fossil fuel emissions cap and draft methane regulations, saying they would cost the province’s oil and gas sector between $5.18 billion and $6.66 billion (CAD seven billion and nine billion) by 2030.

The federal government's submissions to Environment and Climate Change Canada on the Oil and Gas Emissions Cap and Methane 75 regulations highlight the negative impacts both policies will have on the province and the energy sector, Saskatchewan said in a recent statement.

According to Saskatchewan's own preliminary economic analysis, the impact of the emissions cap, alongside Methane 75, suggests that 20 to 30 percent of Saskatchewan's total production is at risk by 2030. The province said this would “negatively impact communities across the province and significantly reduce employment, gross domestic product, and royalties and other tax revenues that fund critical public services”.

The federal government has also indicated that there are no plans to apply similar treatment to imported energy products, according to the statement. This will result in “increased reliance on oil and gas imported from countries that do not have strong environmental records, at the expense of domestic production and the associated economic benefits”, the province added.

"These two policies have the potential to be devastating for our economy”, Saskatchewan Energy and Resources Minister Jim Reiter said. "Both amount to a production cap by default and represent further instances of the federal government infringing on Saskatchewan's constitutionally protected right to develop our natural resources”.

"We urge the federal government to scrap both policies, and instead focus on practical solutions that reduce emissions while supporting the oil and gas sector", Reiter added.

According to the statement, Saskatchewan's upstream oil and gas industry has made significant progress in reducing emissions and “will continue to achieve results” guided by policies and programs already in place. From 2015 to 2022, greenhouse gas emissions in Saskatchewan from venting and flaring at upstream oil facilities were measured as being down 64 percent and methane emissions at a decrease of 70 percent, the statement noted.

Canada’s federal government announced the draft framework requiring the oil and gas industry to reduce emissions 35 to 38 percent below 2019 levels by 2030 during COP 28. The pollution cap puts a limit on the amount of emissions the sector produces, but provides compliance flexibilities, mostly with a limited number of emissions allowances or permits, for an output of 20 to 23 percent below 2019 levels. The federal government in a statement said the proposal “sets a limit on pollution, not production”, further stating that “no sector of the economy should be allowed to emit unlimited pollution”.

Stakeholders who have voiced their disagreement on the proposed emissions cap include the province of Alberta and the Canadian Association of Petroleum Producers.

Independent public policy think tank Montreal Economic Institute (MEI) said the emissions cap would cost the Canadian economy over $4.41 billion (CAD 6.0 billion) per year and “have a negligible impact on the environment”.

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