Emissions cap could cost oil and gas sector $75B in lost investment: CAPP

The findings align with what the energy sector has long been saying — that Ottawa's proposed cap on emissions will amount to a de facto cap on fossil fuel production.

A new report commissioned by an industry lobby group on the federal government’s proposed emissions cap stirred up strong reactions from both oil and gas supporters and environmental groups on Monday.

The report, by S&P Global Commodity Insights, was commissioned by the Canadian Association of Petroleum Producers to examine the impact of various proposed emissions-reducing policies on Canada’s conventional (non-oilsands) oil and gas producers.

Its conclusions Monday were used to support the industry argument that legislating an emissions ceiling will inhibit investment and growth, even as opponents argued the report’s methodology was flawed.

The commissioned report concludes that if oil and gas drillers were required to cut greenhouse gas emissions by 40 per cent by 2030, industry could see $75 billion less in capital investment over the course of the next nine years compared with current policy conditions.

The study says that would translate to one million barrels of oil equivalent less of production per day by 2030 compared with current forecasts, and 51,000 fewer jobs by 2030 than under existing government policies.

The findings align with what Canada’s oil and gas sector has long been saying — that the federal government’s proposed cap on emissions from the industry will amount to a de facto cap on fossil fuel production.

On Monday, CAPP president Lisa Baiton said the new report is proof that a federally mandated emissions cap “should not proceed.”

“Declines in production forced on the industry by a stringent emissions cap will result in significant job losses for Canadians, severe impacts on the economy and our GDP, and have the potential to compromise Canada’s energy security and prosperity,” Baiton said.