According to a recent article from the Financial Post, IHS Energy is reporting that Alberta oil sands firms pay more as a result of climate change policies than their U.S. oil and gas peers. The IHS study also states that Canadian policies provide little to no environmental benefit.
Policy Differences Penalize Oil Sands, Benefit Shale Gas Production
IHS suggests that the different approaches Canadian and American policy makers are taking toward greenhouse gas (GHG) reductions benefit U.S. producers and challenge their Canadian counterparts. The primary reason is that south of the border, GHG policies target coal-intensive power generation, while Canada’s climate laws focus on Alberta’s oil sands.
More on the American perspective to GHGs is available on the US Environmental protection agency’s (EPA) website.
The rise of cheap shale gas production has made it economically easier for American power generators to move away from emissions-intensive coal and toward natural gas. Consequently, U.S. GHG policies are not penalizing American energy companies with the same intensity that Canadian regulations impose upon oil sands producers.
This is in despite of the fact that Canada is already a global leader in renewable power generation.
Oil Sands Projects at Risk
Alberta’s energy industry is already deeply troubled. The provincial government’s economic update this week forecasts energy investment at roughly half of what it was two years ago, and non-energy investment is also declining sharply.
The IHS study states that Canadian “Unilateral climate policy adds cost that could move investment, activity, and associated emissions from Canada to regions with less-stringent policies, with little or no net reduction in global emissions.”
The report also notes that the U.S. was the world’s second largest GHG emitter in 2013, with Canada only the eighth, and that Canada is an oil exporter, while the U.S. is an importer.
To learn more about the new report, read the article on the Financial Post website.