Big oil and gas producer Canada to cap sector's emissions

The world's fourth largest oil and gas producer proposes to cap 2030 CO2 emissions by as much as 35 to 38 percent below 2019 levels, and allow companies to trade credits to meet that goal.

The target, however, is lower than originally planned for an industry that is responsible for nearly one-third of Canadian carbon dioxide emissions, and could drop further when the rules and cap and trade system are rolled out following consultations.

"The plan to cap and reduce emissions from Canada's largest emitting sector is ambitious, but practical," Environment Minister Steven Guilbeault said in a statement.

"It considers the global demand for oil and gas -- and the importance of the sector in Canada's economy -- and sets a limit that is strict, but achievable," he said.

The cap would regulate upstream oil and gas facilities and liquefied natural gas facilities -- which represent about 85 percent of emissions from the oil and gas sector, according to the government.

Speaking from Dubai where he was attending climate talks, Guilbeault added that the cap promised in 2021 elections will reduce Canada's emissions "at a pace and scale needed to reach carbon neutrality in Canada by 2050."

Oil-rich Alberta province and several industry associations panned the framework.

Despite assurances to the contrary it "could result in significant curtailments" on oil production, said Lisa Baiton, president of the Canadian Association of Petroleum Producers.

Environmental groups largely praised the cap but lamented its delayed implementation -- expected in 2026 after consultations -- and noted that the CO2 reduction target falls short of those faced by other sectors.

"Canadians and the world cannot afford three more years of the oil and gas industry wreaking havoc," said Caroline Brouillette, the executive director of Climate Action Network Canada.

Resources Minister Jonathan Wilkinson told a news conference that Ottawa "will be looking for progress between now and 2030. But the kinds of reductions that we are looking to see in the oil and gas sector do require some time."