Ottawa draft rules cap emissions from oil and gas sector to 35% below 2019 levels

A dump truck works near an oil sands extraction facility near Fort McMurray, Alta. on June 1, 2014. JASON FRANSON/The Canadian Press

Alberta has vowed it will fight new federal draft regulations released Monday that will cap greenhouse gas emissions from Canada’s oil and gas sector to 35 per cent below 2019 levels.

The much-anticipated proposed rules are at the lowest end of a range outlined in a policy framework the federal government released in December. That plan outlined a cut of between 35 per cent and 38 per cent, which was itself a softer target than many had expected. It drew the ire of environmental groups, which said the cap should be tougher, and the oil and gas sector, which is roundly opposed to any such policy at all.

Reaction to the draft rules Monday further underscores the deep chasm between the fossil fuel sector and the federal government. Industry and the Alberta government say a cap will spell doom for the oil and gas sector, but Ottawa maintains firm targets are necessary to spur action on emissions reduction.

The new rules would be executed via a cap-and-trade system. Facilities covered by the cap would be allocated a number of emissions “allowances,” and at the end of each year, they would have to remit to the government one allowance for each tonne of carbon pollution. Over time, the government would give out fewer allowances corresponding to the declining emissions cap.

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