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Canada and Alberta Sign Energy Collaboration MOU

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Prime Minister Mark Carney and Alberta Premier Danielle Smith on Thursday announced the signing of a Memorandum of Understanding (the MOU) intended to lower emissions, support natural resource development, and strengthen economic competitiveness. The MOU sets out a framework for enhanced federal-provincial collaboration in the energy sector with the stated goal of achieving net-zero emissions by 2050 while advancing Alberta’s energy-resource potential. The announcement also prompted debate, including references to the potential development of at least one new bitumen pipeline to the B.C. coast. It also prompted the resignation from Cabinet of Steven Guilbeault, Minister of Canadian Identity and Culture and former Minister of Environment and Climate Change. This bulletin summarizes the MOU’s key objectives, priority projects, and federal and provincial commitments, including actions related to Alberta’s Technology Innovation and Emissions Reduction (TIER) system. Objectives. The MOU outlines the following objectives: Increase production of Alberta oil and gas to contribute to export and national security goals, while reducing the emissions intensity of Canadian heavy oil production to reach net-zero by 2050. Expand electricity generation capacity in Alberta for consumer and industrial use, including demand from AI data centres, while achieving net-zero GHG emissions in the electricity sector by 2050. Establish electricity and energy policies that advance affordability, grid stability, competitiveness, and long-term investment certainty, and that attract domestic and foreign private-sector capital. Reduce regulatory overlap and simplify permitting processes to achieve a maximum two-year approvals timeline. Provide opportunities for Indigenous rightsholders to participate in consultation processes and economic activities, including through ownership and partnership arrangements. Priority projects. The MOU identifies the following priority projects: Development of one or more privately financed pipelines, in addition to the Trans Mountain expansion, with Indigenous co-ownership and economic participation. At least 1 million barrels per day of lower-emission Alberta bitumen with access to Asian markets is identified as a priority. An application to the…

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Canada Releases 2030 Emissions Reduction Plan

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Environment and Climate Change Canada (ECCC) today released the 2030 Emissions Reduction Plan (the Plan) under the Canadian Net-Zero Emissions Accountability Act (the Act; read our earlier bulletin on the Act here). The Plan sets out current actions, additional funding of $9.1B, and several new initiatives to meet Canada’s emissions reduction target of 40-45% below 2005 levels by 2030, as provided last year in an update to Canada’s Nationally Determined Contribution (NDC) under the Paris Agreement (read our earlier bulletin on Canada’s updated NDC targets here).   The Plan also sets a new interim objective of reducing GHGs by 20% below 2005 levels by 2026, noting that this interim objective is not an official target akin to Canada’s 2030 NDC, but that progress towards achieving the objective will be a cornerstone of progress reports associated with the Plan in 2023, 2025, and 2027.   This bulletin highlights key parts of the Plan and summarizes the newly announced funding and initiatives, across the following categories: Carbon pricing Clean fuels Clean growth funding Methane Buildings Electricity Heavy industry Oil and gas Transportation Agriculture Waste Nature-based solutions Clean technology and climate innovation Sustainable finance Jobs, skills, and communities Prime Minister Justin Trudeau launched the Plan in an address at the GLOBE Forum in Vancouver earlier today.  Carbon pricing. The Plan notes the measures undertaken to address economy-wide emissions including the federal fuel charge and the Output-Based Pricing System for industrial emitters under the Greenhouse Gas Pollution Pricing Act. Escalating the federal benchmark price to $170 by 2030 is meant to further support the 2030 targets of the federal government along with continued consultations on a possible border carbon adjustment (read our earlier bulletin here). Very significantly, the Plan puts forward the concept of investment approaches, like carbon contracts for differences, which enshrine future price levels in contracts between the federal government and low-carbon…

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U.S. Judge Cites Climate Change in Cancelling Oil and Gas Leases

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A federal judge of the U.S. District Court for the District of Columbia has cancelled oil and gas leases of 80.8 million acres in the Gulf of Mexico, citing inadequate environmental assessments of the impact of GHG emissions on climate change. The judge determined that the Interior Department “acted arbitrarily and capriciously in excluding foreign consumption from their [GHG] emissions calculations” contrary to requirements under the National Environmental Policy Act (NEPA).  Environmental groups claimed the NEPA analysis performed by the Bureau of Ocean Energy Management was irrational and inconsistent with available data in determining that the GHG emissions associated with the lease sale would be lower and not contribute to climate change compared to a no-action scenario. The Interior Department must now conduct new analysis taking into account GHG emissions resulting from the development and production of the leases, including the associated emissions from foreign consumption. The Interior Department must then consider the new analysis in determining whether to hold a new auction for the cancelled leases.  President Biden, during his campaign for office, had stated that there would be no new drilling for oil and gas on federal lands and signed an Executive Order to that effect early last year. However, Attorneys General from 13 states successfully sued to have previously planned auctions from the Trump Administration go forward, with major oil companies including Shell, BP, Chevron and Exxon Mobile bidding $192M for the now cancelled drilling rights.  For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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