Ottawa formally asks Alberta to enact cap on oilsands emissions as Teck Frontier decision looms

Canada's environment minister has formally asked his counterpart in Alberta to give regulatory teeth to the province's legislated but not enforced 100-megatonneannual cap on greenhouse gas emissions from the oilsands industry.

Jonathan Wilkinson's message comes in a letter sent to Jason Nixon on Wednesday, after days of public back-and-forth between the two politicians about the cap and how it might relate to the looming federal decision on the proposed Teck Frontier oilsands mine.

In his own public letter sent on Feb. 12, Nixon accused Wilkinson of "changing the goalposts" by bringing forward the cap at the last minute as a potential condition related to the Teck project and attempting to negotiate through the media rather than directly with the Alberta government.

"During our discussions, at no time did you communicate to me that the100 megaton[ne]cap on sector greenhouse gas emissions needed to be in regulation," Nixon told Wilkinson in that letter.

"In fact, when I directly asked you whether you thought the cap needed to be formally brought into regulations, you told me it was fine as it was. Similar assurances were provided at the officials' level."

Emissions cap and Teck Frontier

In Wilkinson's replyWednesday he said the federal government has always wanted the cap introduced through legislation by Alberta's previous NDP government to be brought into force through regulation.

"We continue to encourage Alberta to follow through and fully implement its legislation to limit emissions to 100 million tonnes from the oilsands," Wilkinson wrote.

The federal minister's letter also mentions the Teck project, notingthe joint review panel that examined the project and deemed it to be in the public interest also "concluded that the project is likely to result in significant adverse environmental effects."

"It is our government's strong view that all parts of Canada must work together to ensure our country continues to attract capital, create jobs, protect natureand cut pollution as the world transitions to lower-carbon energy resources," Wilkinson wrote to Nixon.

He added that "Alberta is the largest emitting jurisdiction in Canada, in both real and per capita terms" and said "we need to work together" to achieve Canada's international obligations under the Paris Agreement on climate change.

Wilkinson said "Canada is committed to doing what is necessary" to not only meet but exceed its 2030 emissions-reduction target and, furthermore, "to achieve net-zero emissions by 2050 in order to avoid the worst impacts of climate change."

That will require major changes, however. At current emissions rates, Canada is on track to miss its 2030 target by nearly 100 megatonnes(Mt), according to federal projections that include climate actions announced as of September 2019.

The federal cabinet has a looming deadline at the end of February to make a decision on the Teck Frontier project, which is expected to generate just over four megatonnes of emissions annually, if approved.

"I can assure you that this decision will be made based on the merits of the project proposal and will take into account all evidence and circumstances, as the law requires," Wilkinson said.

Jess Sinclair, Nixon's press secretary, said Nixon looks forward to speaking with Wilkinson about the letter.

"We take issue with some of the assertions made in the minister's letter, namelythe notion that Alberta will be bumping up against the province's emissions targets within the next decade. I'd reiterate that the 100Mt cap is a backstop policy to prevent unconstrained emissions growth without technology improvement," Sinclair said in an emailed statement.

"Our TIER program will keep us under the cap another policy that the current federal government has previously endorsed."

How close the oilsands are to 100 Mt

The federal government projects Alberta's oilsands will produce 91.9 megatonnes of emissions this year in total, but not all of those emissions would be counted under the legislated cap.

With exemptions for the cogeneration of electricity and new upgrading activity brought online since 2015, the cap-applicable total is expected to be 86.5 megatonnes, Wilkinson wrote, based on federal projections "prepared in accordance with international best practices and aligned to reporting guidelines under the Paris Agreement."

"With these exemptions, Alberta oilsands emissions bump up against the 100 million tonne cap in 2030," he wrote.

Wilkinson said the federal government would adopt the definition of an oilsands sitein Alberta'sOil Sands Conservation Actbut would exclude refining emissions from its projections "as a courtesy."

But even then, he added, "there is significant risk that Alberta's cap on emissions will be exceeded in 2030."

The federal figures for past emissions, meanwhile, areconsistently higher than what the province has produced.

But a large part of the discrepancy is due to different methodologies for calculating the figures, according toJustin Wheler, executive director of emissions regulation and compliance with the Alberta government.

Why the numbers vary

A key difference, Wheler said, is that the provincial numbers are based on "bottom-up" reports from individual oilsands facilities, while the federal numbers come from a "top-down" analysis conducted in order to produce the regular reports that Canada submits to the United Nations.

At the same time, he said Alberta has always acceptedthe federal reports to the UN"as the official and total inventory for the country and the province," but those are not what the province would use to measure oilsands emissions against the cap it created.

"It is not intended to report on Alberta's legislation or regulations. So it's a very different set of data for a different purpose," Wheler said.

"They're not going to dig into the facility-by-facility data for that kind of national inventory compilation and approval process," he added. "So there's always going to be some minor differences there that neither I nor, I suspect, my federal counterparts would be fussed about."

The federal projections for 2020 are also slightly higher than what the Pembina Institute, an independent think-tank, produced in a report released Wednesday.

Rather than 86.5 megatonnes, the Pembina report projects cap-relevant emissions from Alberta's oilsands will total 82 megatonnes this year when the exemptions for cogeneration and new upgrading are applied.

The Pembina projection also excludes two megatonnes worth of emissions from primary bitumen production, also known as cold heavy oil production with sand (or CHOPS), which it understands to be non-applicable under Alberta's cap legislation.