Lines drawing in Alberta's oil sands: Operators hope for certainty in SGER decision

摘要

Supporters call it the most significant regulation aimed at curbing greenhouse gases in Alberta's, and perhaps Canada's, history - the first carbon pricing regulation imposed on the oil and gas industry in North America. Others call the Specified Gas Emitters Regulation (SGER), set to expire in December, "low hanging fruit" for a government and industry still reluctant to take a bite out of emissions from Alberta's oil sands. The SGER was introduced by Alberta in 2007 to circumvent federal regulations widely expected at the time. It requires large facilities, including most oil sands operators, to cut greenhouse gas emissions 12% per barrel from pre-regulation levels. For every tonne of greenhouse gas that falls short, firms must pony up 15 Canadian dollars (US$13.44) to the Climate Change and Emissions Management Fund (CCEMF). To meet the emissions reduction target, oil companies may also choose to improve facility operations, buy emission performance credits (EPC) from another facility that has surpassed its targets or purchase credits from an Alberta-based offset project. Because any combination of these can be used to meet the target, the fixed CA$15 paid to CCEMF acts as a price cap. A facility has nine years to reach the full 12% and is expected to maintain that reduction rate.