CAPP: Inefficient climate policies discouraging investment

The Suncor oil sands facility seen from a helicopter near Fort McMurray, Alta., Tuesday, July 10, 2012. The oilsands boom that became a bust hits home when driving by empty workforce accommodation camps along highways near Fort McMurray in northern Alberta. THE CANADIAN PRESS/Jeff McIntosh

The Canadian Association of Petroleum Producers (CAPP) is calling provincial and federal climate policies inefficient.

In a report released on Tuesday, CAPP wrote that the emissions-reduction programs are creating unintended consequences and discouraging investment in the natural gas and oil industry.

The report estimates that Canada’s upstream oil and natural gas sector will pay in excess of $25 billion over the next 10 years with current provincial and federal climate initiatives.

As a result, companies are leaving Canada to set up operations in countries with little or no climate policies.

“Competitiveness continues to be one of our biggest challenges. Investment in Canada’s energy industry – and jobs for Canadians – will continue to leave for other jurisdictions unless there are changes to regulatory policies that enable growth,” said CAPP, president and CEO, Tim McMillan.

Currently, federal policies are intended to reduce greenhouse gas emissions by 30 per cent below 2005 levels by 2030. The federal benchmark includes a carbon levy on fossil fuels set at $10 per tonne in 2018 and increasing by $10 annually to $50 per tonne in 2022.

In the report, CAPP outlines that the country needs climate policy that will reduce greenhouse gas emissions and encourage innovation in the oil and gas sector to diversify the economy and successfully cut down emissions.

CAPP is calling on the provincial and federal government to assess all costs and recognize the cumulative burden, tax increases and royalty changes when creating climate policies.