By Nia Williams
(Reuters) – Canada’s province of Alberta on Thursday offered to work with the federal government to boost investment in carbon capture and storage (CCUS), but only if Ottawa gets Alberta approval on climate action affecting oil and affect gas.
In an open letter to Prime Minister Justin Trudeau, Alberta Premier Danielle Smith said those policies include a proposed cap on oil and gas emissions, clean energy regulations and legislation to support the retraining of workers for green energy jobs.
Canada, the world’s fourth-largest oil producer, aims to cut carbon emissions by 40% to 45% below 2005 levels by 2030. The oil and gas sector is the country’s most polluting industry, responsible for more than a quarter of all emissions.
The country’s biggest oil producers, a group known as the Pathways Alliance, want to develop CCUS technology to store emissions underground but have said they need more public money to fund the multi-billion dollar projects.
In her letter, Smith proposed coordinating a CCUS state income tax credit with an extension of Alberta’s Petrochemicals Incentive Program (APIP) to CCUS projects.
She also called for the immediate establishment of a federal and provincial working group, led by ministers, that could work to reach agreement on a joint stimulus program in the coming weeks.
However, she said the invitation came with “one non-negotiable condition”: that Ottawa refrain from passing any legislation or policy affecting the oil and gas sector without Alberta’s input and full approval.
“While Alberta stands ready to work as an active partner with the federal government on a coordinated approach to reducing Alberta and Canada’s net emissions, under no circumstances will our province accept the imposition of arbitrary and unachievable targets or policies that spell the end of a meaningful time.” long-term investment in Alberta’s energy sector,” Smith wrote.
Ottawa has already unveiled a CA$2.6 billion (US$1.93 billion) tax credit for CCUS investments over the next five years in 2022.
Traditionally conservative Alberta has a strained relationship with the Liberal government in Ottawa.
Smith, who became leader of the United Conservative Party in October and vowed to fight back against federal overreach, faces provincial elections in May and has accused Trudeau of wanting to “phase out” the oil and gas sector.
In a recent interview, Alberta’s environment minister told Reuters that tensions over the proposed emissions cap are holding back progress on other issues such as CCUS support.
The federal government did not immediately respond to a request for comment.
The Pathways Alliance said it was “encouraged” by Alberta to consider expanding its petrochemicals stimulus program and that Canada must compete with US green energy subsidies.
“We look forward to hearing more details from both governments,” said Mark Cameron, Pathways vice president of external relations.
($1 = 1.3461 Canadian Dollars)
(Reporting by Nia Williams; Editing by Marguerita Choy, Christopher Cushing and Sonali Paul)
