A lobbying group says cutting emissions will cost the oil and gas sector $75 billion in lost investment

CALGARY — A group of oil and gas lobbyists says the federal government’s proposed emissions cap for the sector, combined with stringent methane reduction targets, could reduce production of Canadian non-oil sands fossil fuels by one million barrels a day by 2030.

The Canadian Association of Petroleum Producers says it commissioned a study from S&P Global Commodity Insights to examine what the economic impact of various proposed emissions-cutting policies would be on Canadian conventional and non-oil sands oil and gas producers.

The study found that if oil and gas drilling companies were required to reduce greenhouse gas emissions by 40 percent by 2030, the industry could expect $75 billion less in capital investment over the next nine years compared to current political conditions.

CAPP says this will translate into 1 million barrels of oil per day lower production in 2030 compared to current projections and 51,000 fewer jobs by 2030 compared to current government policy.

Under the federal government’s proposed cap on emissions from oil and gas production by 2030, the sector would have to reduce greenhouse gas emissions by 35-38% compared to 2019 levels. The sector would also have the option to purchase offset credits or contribute to a fund decarbonization, which would reduce this requirement to just 20-23 percent.

But CAPP says the study it sponsored also took into account the projected impact of draft government methane regulations that would require at least a 75 percent reduction in methane emissions from oil and gas below 2012 levels by 2030.

This report by The Canadian Press was first published May 27, 2024.

Canadian Press