Proposed carbon tax increase sparks debate; Bikman

Written by Trevor Busch

Wednesday, 10 April 2013 16:53

A controversial proposal by the province to radically boost levies on carbon production and place imposing greenhouse gas emissions targets on large-scale oil producers has been viewed with surprise by industry insiders and the federal government.
The long-term plan, which calls for emissions reductions of up to 40 per cent per barrel of production, was dropped by Environment Minister Diana McQueen during a recent meeting  in Calgary with senior oil executives and representatives of the federal government.
Reaction to the proposal has been swift, with industry warning emissions targets that are too ambitious could serve as an impediment to international investment in the oil sands sector at a time when it is striving for increased competitiveness.
“I think we need to be very careful that we’re not sending industry a message that creates some nervousness or some uncertainty about just what exactly is going to be happening,” said Cardston-Taber-Warner MLA Gary Bikman.
“Capital investment craves certainty — they want to be able to invest with confidence that things aren’t going to change.”
While acknowledging a need for increased emissions reductions, Bikman is wary of the approach until more details have been revealed.
“Having said that, do we need to be good stewards of the environment? Of course we do. Do our customers, the countries that we do business with expect us to be good stewards? Yes they do. It is important that the province send a clear, consistent message about real plans, genuine plans, that will actually produce good results, not just make good headlines.”
Critics have attacked the proposal as a bargaining chip with the U.S. government in pushing for approval of TransCanada Corp.’s Keystone XL pipeline project.
“I think that is probably true, that there would be an aspect of that,” said Bikman. “The premier has said we need to send a message out to our customers. Danielle Smith (provincial opposition leader) has said the same thing, that people need to know that we are good stewards. We have suggested some real ways to cut back on emissions, as well as particulate contamination, by moving towards natural gas-powered (electrical) generation, as opposed to coal-fired generation. If you phase that in over time, then you’re going to have a much greater impact in an economical way, and a productive way, on reducing carbon emissions. Whatever contribution that plays toward global warming, it will happen in a significant way, as opposed to just raising the price.”
Regulations introduced in 2007 in Alberta required oil sands producers and large-scale emitters to reduce per-barrel emissions by 12 per cent per base year, as well as implementing $15 per tonne penalties for every ton of emissions over their limit.
McQueen’s plan, already being dubbed “40-40”, would require 40 per cent reduction in per barrel emissions and a $40 per tonne penalty when the limit is exceeded. Estimates indicate the regulation could increase the cost per barrel by $2 for oil sands producers.
While an improved environmental policy is a laudable goal, Bikman is concerned about what this plan might entail.

“The best time was 20 years ago. The next best time is today. If our record hasn’t been all that our customers think it should be, we need to give serious weight to their opinion. I think everything needs to be a balanced approach, it needs to be a cadenced approach that’s phased in, so you’ve got the environmental reality versus the economic reality.”
Bikman stressed that Alberta’s oil needs to be considered not just from an environmental perspective, but from an ethical one.
“You can meet both of those realities if you’re consulting all of the stakeholders, because some of those stakeholders are obviously customers for our oil. And what are they doing in their own countries? They can say ‘We think that its dirty oil’, but its ethical oil, in the sense that its not being produced in countries that support terrorism. It needs to be part of the discussion.”
Describing the proposal as a possible “knee-jerk” reaction to speculative pressure by the Obama White House over Keystone XL, Bikman counselled a more cautious approach to emissions reduction.
“Sometimes I get the feeling that some politicians and government people talk out of both side of their mouth, and I’m thinking more about our customers than I am necessarily within our own province. But we don’t knee-jerk. Maybe the premier is getting a clear message that Keystone XL won’t get support from the Obama administration if we aren’t making efforts to make our oil cleaner. Well, that’s a reality. You don’t knee-jerk to that. You say you have a serious plan after some lengthy and intense discussions — when I say intense I don’t mean heated, but deep — about what the science really is. Politicians aren’t scientists, and we shouldn’t mix politics and science.”
More specific details of the proposed plan have not yet been revealed, and it would still require official approval by the provincial cabinet.