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Canada: Carbon fight tones down

| Sourced From Calgary Sun |

Energy Minister Mel Knight struck a conciliatory tone yesterday, saying there is “common ground” between Alberta’s and the federal government’s approaches to cutting carbon emissions. He also said the slowdown of several projects in the oilpatch is not entirely bad news.

Knight’s comments came less than a week after Premier Ed Stelmach lambasted Prime Minister Stephen Harper’s proposal of a North American cap-and-trade system to reduce carbon emissions.

The proposal, contained in last week’s throne speech, seemingly aligned the Conservative government with president-elect Barack Obama but set Ottawa on a potential collision course with Edmonton, which favours carbon capture and storage (CCS) to curb carbon emissions.

“There is some common ground,” Knight said of the two approaches, noting that CCS, although important, may not be the only path to fewer emissions.

He reiterated Stelmach’s concern that a cap-and-trade system, where carbon emitters who exceed their emissions limit can buy credits, could transfer wealth out of Alberta.

At one point, Ottawa and Edmonton, as well as other provinces, need to have a meeting of the minds to figure out how to achieve their separate green plans and what the overarching target will be.

Ottawa seeks to reduce carbon emissions 20% below 2006 levels by 2020, while Edmonton’s target is a 14% dip below 2005 levels by 2050.

Without co-operation from Alberta, the federal government can’t achieve its target — and industry has consistently pressed both levels of government for clarity on environmental regulations.

Alberta’s provincial energy strategy, to be released next month, could shed more light on how Ottawa and Edmonton could collectively squeeze through the green bottleneck.

Meanwhile, several oilpatch players are stuck in a financial bottleneck that’s restricting the money they can use for capital projects next year.

Knight said the slowdown in the pace of development isn’t entirely negative because of the dampening impact the slowdown could have on costs.

Lower costs in the oilpatch could make the province more competitive internationally, he said.

Speaking in a different context, the president of the Canadian Association of Petroleum Producers said that while a sluggish economy “will likely reduce the near-term scope and pace of oilsands investment, we remain confident that this is largely a re-phasing of investment.”

The longer-term fundamentals supporting investment in Alberta’s energy sector “remain quite sound,” Dave Collyer said in a speech last night to the Canadian Council for Aboriginal Business.

Collyer said that over the next decade, oilsands investment will swell to $100 billion.



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