One element all agree on is that if the oil sands are targeted, the revenue needs to stay in Alberta. “You can hit the production side as long as the money is used in some way to address the problem,” says Roger Gibbins, president and CEO of the Canada West Foundation. That’s the approach that Alberta has taken with its climate program, which sets emissions levels and then penalizes companies who exceed them. The money is then funnelled into a technology fund to explore things like carbon capture. But critics say the penalties need to be much higher to have a meaningful impact on companies that by all appearances have been dragging their feet on the climate front. None of the big producers in Fort McMurray have committed to using carbon capture systems, apparently because of the cost and an overall lack of necessary infrastructure, such as pipelines.
Most observers say that any kind of crackdown on the oil sands will ultimately need to be part of a broader plan. There’s “an expectation that a fair set of policies would target consumption as much as production,” says Gibbins. That’s why a carbon tax is often touted as an ideal policy tool. It could zero in on oil sands companies, but would also force everyone from motorists to other big industries to share the pain.
The industry claims it is not fundamentally opposed to cap and trade or carbon taxes (with the caveat that revenues are used to develop cleaner technologies). One oil sands industry executive, speaking on the condition of anonymity, suggested Ottawa could also choose to target the oil sands by stiffening environmental regulations and requiring that all new projects invest in carbon capture and storage technologies. One of the biggest complaints of many in the oil sands industry is simply the lack of a clear climate change plan from the government. Planning multi-decade, multi-billion-dollar projects without a clear sense of what the government has in mind has been a major challenge. “The general sentiment in the industry is optimistic in terms of global demand for what they’re doing,” says Gibbins. But they are hamstrung without “some relatively robust concrete framework” on climate change policy.
For the time being, however, the Copenhagen summit, for all the negative attention it heaped on the oil sands, isn’t necessarily being viewed as a negative by the industry. While the petroleum producers’ association maintains that the government’s stated emissions target—a 20 per cent reduction from 2006 levels by 2020—is “very ambitious,” it also says the industry is pleased that the Copenhagen agreement basically allows countries to set their own targets and that it reinforced the role of technological solutions. And the best news yet for the industry: the much tougher targets of the earlier Kyoto agreement have been all but cast aside in favour of more realistic—environmentalists say less effective—goals.
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