The federal government is proposing to use an industry-specific cap-and-trade system or a modified carbon pricing system to set a ceiling for emissions from the oil and gas sector and drive them down almost 40 per cent by the end of this decade.
The two options are contained in a discussion paper Environment Minister Steven Guilbeault will publish Monday. It is the first glimpse Canadians are getting of how the Liberals expect to implement the oil and gas emissions cap promised in last year’s election.
The oil and gas industry accounts for more than one-quarter of Canada’s total emissions — 179 million tonnes in 2020, or about what an average car would emit driving around the equator more than 17 million times.
“We simply cannot ignore the fact that the oil and gas sector is Canada’s biggest emitter,” Guilbeault said in April during a House of Commons committee meeting studying the proposed emissions cap on oil and gas.
What Guilbeault didn’t say then, and what the discussion paper doesn’t say now, is what the specific emissions cap will be. It’s supposed to start at “current levels” — which going by the data that was available when that promise was made would mean 2019 levels, or 203.5 million tonnes.
Background documents and government sources suggest the cap for 2030 will be very close to the one proposed in the new national Emissions Reduction Plan in March — 110 million tonnes. That’s a 46 per cent cut from 2019 levels, and 32 per cent over 2005.
Canada is aiming to cut emissions across all sectors 40 to 45 per cent from 2005 levels by 2030.
The oil and gas sector has not had emissions that low since 1992. In the last three decades, as production of gas, conventional oil and oilsands soared, emissions from the sector have risen 83 per cent. Overall emissions in Canada are about 23 per cent higher over the same time period.
Minister aims to have final plan by 2023
Input on the options to manage the cap will be accepted until Sept. 30 with Guilbeault aiming to unveil the final plan early in 2023.
The first proposed option involves a new cap-and-trade system on the oil and gas sector in isolation. The total emissions allowed would be divided into individual allowances which will be allocated to specific companies mainly through an auction.
Companies that don’t buy enough allowances to cover their emissions will have to buy allowance credits from other oil and gas companies that bought more than they need.
The funds raised from the auction would be recycled to programs that help the sector cut emissions.
The second option would modify the industrial carbon price already applied to the oil and gas sector, possibly by hiking the price itself if needed, but with the aim of ensuring the emissions from the oil and gas industry itself fall by limiting the trading of carbon credits to the sector.
Companies can currently reduce the carbon price they pay by buying credits from others that produce less than their emissions limit. The modified plan would allow them only to buy credits from other oil and gas companies, not from other industries.
Most of Canada’s oil and gas producers are already cutting emissions due to other regulations and a desire to become a cleaner, more competitive option for global customers.
That has been the Conservative party’s position on the industry for years — using cleaner Canadian fossil fuels to displace dirtier ones produced elsewhere.
The industry has work to do, particularly on the oil side, where Canada’s heavier oils require more energy to extract from the ground than in places like Saudi Arabia. While oilsands emissions per barrel of oil, known as the emissions intensity, is down about 30 per cent since 1990, it’s still higher than many global competitors.
The Oil Sands Pathway Alliance, with six of the biggest oilsands companies on board, is aiming to get emissions to net zero by 2050, mainly through carbon capture and storage projects that trap greenhouse gases before they go into the atmosphere and then store them back underground.
The alliance, whose member companies account for 95 per cent of oilsands production, released a plan this spring aiming to cut 22 million tonnes of emissions from 2019 levels by 2030.
Company leaders have said they’re not opposed to a cap, but insist it must be realistic and based on consultations with industry about what is feasible. Anything more than that would likely drive production cuts and job losses, they have argued.
But the Alliance and government remain far apart on some fundamental issues, such as determining where current emission levels actually stand. The most recent national inventory report says oilsands production and processing emissions were 83 million tonnes in 2019, but the Alliance pegs the figure at 68 million.
A government official, speaking on background because he was not authorized to speak publicly, said if the cap on emissions for the oil and gas sector comes in higher than the Emissions Reduction Plan, it will force other industries to cut more than their share or Canada won’t meet its 2030 targets.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
