Brian Zinchuk is editor and owner of Pipeline Online
Erika Ritchie. Handout
REGINA – On Nov. 1, Prime Minister Justin Trudeau told the world during the United Nations Climate Change Conference UK 2021 in Glasgow, Scotland, that Canada would “cap oil and gas sector emissions today, and ensure they decrease tomorrow, at a pace and scale needed to reach net zero by 2050.”
On Nov. 4, New Democratic Party Energy and Resources critic and MLA for Saskatoon Nutana Erika Ritchie spoke with Pipeline Online about Trudeau’s comments at COP26.
Pipeline Online: What does the federal government’s announced move to cap oil and gas emissions mean? Do you think it’s going be on just production, or on consumption?
Erika Ritchie: You know, it’s not really clear, what the implications are on this policy area. And you know, that’s really a big part of the problem. They’re the kind of questions that the federal government should answer. And, we’re just concerned that they’ve been making sweeping policy announcements without proper consultation with our provincial representatives, and that Saskatchewan needs a seat at the table.
Pipeline Online: Apparently there wasn’t a consultation with Saskatchewan, or the other provinces before this announcement was made in Glasgow. What do you think of that?
Ritchie: As far as we know, there wasn’t any. And that’s just a part of the problem here, in that we have a federal government treating the provinces poorly when this is going to have a significant impact on their economies.
Pipeline Online: Should this cap apply to imported oil and gas in Eastern Canada?
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Ritchie: You know, it’s a really great question. Again, it’s not really clear what the intention is on that front. The kind of questions we have in our own minds should be answered by the federal government. I did hear mention of potential carbon border adjustment being bantered around at COP, but regardless, it’s still the same issue; that this is a sweeping policy change without proper consultation. And Saskatchewan should have been consulted.
Pipeline Online: Notably, the federal government did not announce cap on emissions from the cement industry in Quebec. Why do you think that is?
Ritchie: I can only surmise but, you know, I think it likely was because of politics. I mean, obviously, the Prime Minister is a Quebec member of Parliament. And he’s focused on winning more seats in Quebec in the next election and doesn’t seem to be interested in winning more seats Saskatchewan. And that likely impacted the proposal.
Pipeline Online: Does this mean we will see more gas plants built to reduce venting and flaring, such as the Oil and Gas Processing Investment Incentive announced on Tuesday? Or does it mean an end to any future development like this?
Ritchie: Just going from an announcement by the federal government, it’s really hard for us to say what the implications are going to be for this policy area. Obviously, that is definitely a problem. And the way that this impacts the programs is yet to be seen.
Pipeline Online: Does this mean for any new projects, efficiencies or shutdowns must be found for existing projects?
Ritchie: I think that if there had been proper consultation, we would have been able to understand, and explore, how this might actually be implemented and whether or not that was the expectation. I mean, certainly, Saskatchewan has its own unique regional issues that need to be dealt with, and unless there is proper consultation, how this can be implemented in the best way possible, really can’t be identified.
Pipeline Online: The government of Saskatchewan stated goal is to increase oil production to 600,000 barrels per day, which is roughly one-third increase over today. How can we accomplish that with a cap on emissions? Do you think we should be trying to increase production like that?
Ritchie: This is the crux of the problem with this policy. And as long as there is global demand for oil and gas, that demand should be met by oil and gas produced in Saskatchewan. And capping emissions makes it incredibly difficult. We can do that as a province, and create good paying jobs for Saskatchewan people.
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Pipeline Online: Does this reinforce the necessity of carbon capture and storage and enhanced oil recovery? Does this mean heavy emitters, like Cenovus’ numerous SAGD plants in Northwest Saskatchewan, Will they need to capture their own CO2 and then perhaps use that for enhanced oil recovery?
Ritchie: This might be something to look at, if this is what is ultimately required. Again, we don’t know. There’s been no details provided to us. There’s been no opportunity to undertake any consultation. As I mentioned, just a moment ago, if all these things are going to impact on the economics of the project, if they are required, and you know, it could affect feasibility visibility.
Pipeline Online: Can Cenovus keep building these cookie cutter SAGD plants, if the federal government could move in short order to cap emissions? What does this do for investment certainty or uncertainty in that industry? So like I said, $250 to $350 million dollars (per plant), and the federal government’s going say, “Oh, guess what, no more new emissions means no more new emissions,” do you start building the next plant?
Ritchie: They’re going to have to look at the market fundamentals around it, and the prices that they can get, and whether or not if there’s going to be added costs, are they still going to have a feasible project at the end of the day? But, you know, I go back to what I said before: this unilateral move by the federal government does nothing to increase certainty. And that puts jobs at risk. And we don’t think that the federal government should be proposing sweeping policies without proper consultation, and Saskatchewan needs a seat at the table.
Pipeline Online: Do you think the Impact Assessments Act, also referred to by the Saskatchewan government as the “No More Pipelines Act,” will be used by the federal government to say, “No more additional emissions, so you can’t build anything additional from now on. A cap on emissions means no additional emissions, period?” Do you think that was an underlying reason for that act in the first place?
Ritchie: I can’t say. Certainly, if they were to do that, it would be very irresponsible and the federal government should not be proposing sweeping policies without consultation. And we need a seat at the table at the end of the day. It still comes back to that same position.
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