Oil and gas industry emission rules still not ready from Ottawa

For the second time in two years, the federal government has missed its target to publish greenhouse gas emission regulations for Canada's oil and gas sector.

Obama's climate change speech and coming cabinet shuffle may have played part in delay

An aerial view shows an oilsands facility near Fort McMurray, Alta. The oilsands are Canada's fastest-growing source of greenhouse gases, which make it harder for Canada to hit its 2020 greenhouse gas reduction target of 17 per cent below 2005 levels (Jeff McIntosh/Canadian Press)

For the second time in two years, the federal government has missed its target to publish greenhouse gas emission regulations for Canada's oil and gas sector.

Environment Minister Peter Kent told the House of Commons environment committee in March that he hoped to have the regulations ready "by mid-year." Now, at the midpoint of the year, those hopes appear to have been dashed.

"The regulations will be announced in due course," an official in the minister's office told CBC News when asked to comment. The same official went on to add that work on the regulations is progressing and the department is working with a variety of stakeholders, the industry and the provinces.

The Conservative government has been trying to deal with the country's greenhouse gas emissions in one form or another since it was elected in 2006. The Conservatives began a sector-by-sector approach to regulating greenhouse gas emissions in 2010. They started work on the coal sector first and then small- and large-vehicle emissions. In June 2011, the government announced it would begin work on the oil and gas sector.

At one point, the government said it would have the regulations finished by the end of 2012. When that deadline was missed, Kent made clear his new hope for a mid-year deadline at an environment committee meeting in March, in response to a question from the NDP's environment critic, Megan Leslie.

"Truthfully, I didn't expect very much from this minister when it comes to oil and gas regs," said Leslie, who added that was because the government has failed to deliver on greenhouse gas reduction plans so many times in the past.

"I think there is inaction on this file because they don't care about it," said Leslie, when asked if government inaction might have something to do with rumours of Kent's imminent shuffle out of the environment portfolio.

Environmental non-governmental organizations are frustrated by the delay, because, they say, the longer the government waits the harder it will be for Canada to hit its 2020 greenhouse gas reduction target of 17 per cent below 2005 levels.

"We really do need to see regulations. Obviously, it's disappointing that the government missed another deadline," said Clare Demerse of the Pembina Institute, an environmental think-tank.

Oilsands production is the fastest growing source of greenhouse gas emissions in Canada, she said, and companies are faced with regulatory uncertainty that stalls investment in pollution reduction technologies.

From the industry's perspective, it is just following the government's lead.

'I don't know how they are going to pull the rabbit out of the hat on this one.'—Megan Leslie, NDP environment critic

"We are just waiting," said Geraldine Anderson, spokeswoman for the Canadian Association of Petroleum Producers.

Demerse thinks U.S. President Barack Obama's climate change speech last week is another reason a plan has yet to materialize.

"That has clearly increased the pressure on the government of Canada to get these regulations right," she told CBC News.

As for prospective plans, Alberta has proposed what has come to be known as the 40/40 target — a 40 per cent reduction in greenhouse gas emissions per unit of oil produced, paired with a $40 per tonne levy on emissions above the regulated level.

Reports suggest that industry would prefer a 20/20 plan and that the federal government hopes to reach a compromise position of 30/30.

In the opinion of the Pembina Institute, none of these plans will be enough to hit the 2020 target. Its research suggests a 42 per cent reduction and a $100 per tonne levy would be the way to go.

"I don't know how they are going to pull the rabbit out of the hat on this one, but this is the sector that is growing the fastest. This is the sector that is most important when it comes to meeting our emissions [targets]," said Leslie.