On the world stage, Canadian oil majors promote a carbon tax

Executives from a pair of Canadian oilsands companies extolled the virtues of a carbon tax on one of the largest stages for the global energy sector.

Climate change is one of the dominant topics of this year’s CERAWeek, a conference in Houston sometimes dubbed the Super Bowl of the world’s energy sector. This year’s conference has gathered together 4,000 delegates from 70 countries, including politicians, investors and oilpatch executives.

The governments of Alberta and Canada are close to getting it right on tackling carbon emissions, said Janet Annesley, a senior vice-president with Husky Energy, during one of Tuesday’s panel discussions.

She began by pointing to the decision to accelerate the phaseout of coal-powered plants, which will reduce emissions for the country and for companies like Husky, which buys electricity off Alberta’s power grid.

“We can see some lower carbon inputs to our business,” said Annesley, who previously worked for Shell, the Canadian Association of Petroleum Producers and in the office of former federal natural resources minister Jim Carr.

Analyst Kevin Birn speaks with Annesley during a panel discussion about the Canadian oilpatch. (Kyle Bakx/CBC)

Annesley also praised the policies to tackle methane emissions, before applauding the carbon tax.

“Not only do we have the carbon tax that applies to large emitters like Husky in the oilsands, but frankly, the flip side is that the government is using some of those revenues to help industry reinvest in technology. The combination of both of those policies is particularly powerful,” she told the panel’s audience.

Specifically, the industry is using funds from the carbon tax to help research new technologies, such as methods to capture and sequester carbon.

“I don’t want to be left behind,” Annesley said. “We have a carbon challenge for sure, but there is an opportunity for us to find solutions.”

Watch as Janet Annesley speaks about the ‘divide’ in the oilpatch:

The Husky Energy executive says climate polices in Alberta are much better than they were four years ago. 0:26

The policy is not perfect, she said, pointing to the cost and controversy of the carbon tax, in addition to the need to monitor its impact on the Canadian oil industry’s overall competitiveness.

And carbon tax policy in both Alberta and Canada could change this year, with both provincial and federal elections taking place in 2019. Some parties want to scrap the carbon tax, while others want to keep the status quo.

But Annesley says progress is being made.

“We’re in a very good place today — a better place than we were four years ago,” she said.

In a separate panel discussion focused on how the energy sector will meet the United Nations climate goals established under the Paris agreement in 2015, Mark Little, the soon-to-be CEO of Suncor, said the company has “been a huge supporter of a carbon price for literally over two decades.”

In an interview on Tuesday, Little said while Suncor still supports the carbon policy in Alberta, he believes it could be improved. There are too many exemptions, he suggested, so not everyone has to pay the tax. In addition, he said the province should lower taxes elsewhere so that the carbon tax is revenue-neutral instead of an extra burden.

The debate in the oilpatch about the carbon tax is in large part due to the fact the industry is suffering from low commodity prices and the need for more pipelines is not being addressed, Little said. Investment has also plummeted since the 2014 price crash.

“It’s easier to support when we’re thriving and investing,” he said. “The industry is struggling — that’s obvious to everybody.” 

Large oil companies in Canada attract international investors and that’s why they are more likely to favour a carbon tax compared to small- and mid-sized companies.

Watch as Suncor’s Mark Little talks about the politicization of carbon tax:

The oilsands company supports a carbon tax, but says the policy in Alberta could be improved. 1:03

Steve Reynish, also with Suncor, said it’s important to have stability with carbon policies, instead of changing every election cycle. There’s already a vast discrepancy of carbon policies across jurisdictions, he said.

“We need a steady hand; we can’t keep changing these policies on a regular basis,” he said while on stage.

Before Alberta Premier Rachel Notley introduced the province’s carbon tax, Alberta charged large industrial polluters $15 a tonne for emissions over a set amount, through a plan known as the Specified Gas Emitters Regulation (SGER).

Adopted in 2007, SGER made the province the first North American jurisdiction to set a price on carbon, however, the policy would later be roundly criticized for being too lax to make a meaningful dent in overall emissions.

“The nice thing about the current policy is that it is deemed equivalent from the federal government,” said Annesley in an interview. “We would like to see policy that is recognized nationally, and ideally at the international level, in order to support our trade diversification and pipeline goals.”

As carbon policies evolve, some would like governments to take into account emissions around the world. For instance, if natural gas from Canada is used to displace coal in power plants in Asia, then Canada should receive some credit for the reduction of global emissions.

The need for the energy sector to address climate change has been a recurring discussion at the conference, brought up by the International Energy Agency, industry CEOs and politicians. It was even a topic for OPEC’s secretary general during his time on stage.

“We, and more than several of our partners, are impacted by climate change,” said Mohammed Barkindo. “And we have decided to be part of the solution.”



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Sherwood Park

Sherwood Park is a large hamlet in Alberta, Canada within Strathcona County that is recognized as an urban service area.[7] It is located adjacent to the City of Edmonton’s eastern boundary,[8] generally south of Highway 16 (Yellowhead Trail), west of Highway 21 and north of Highway 630 (Wye Road).[9] Other portions of Sherwood Park extend beyond Yellowhead Trail and Wye Road, while Anthony Henday Drive (Highway 216) separates Refinery Row to the west from the balance of the hamlet to the east.[9]

Sherwood Park was established in 1955 on farmland of the Smeltzer family, east of Edmonton. With a population of 70,618 in 2016,[6] Sherwood Park has enough people to be Alberta’s seventh largest city, but technically retains the status of a hamlet. The Government of Alberta recognizes the Sherwood Park Urban Service Area as equivalent to a city.

History

Sherwood Park, originally named Campbelltown, was founded by John Hook Campbell and John Mitchell in 1953 when the Municipal District of Strathcona No. 83 approved their proposed development of a bedroom community east of Edmonton. The first homes within the community were marketed to the public in 1955. Canada Post intervened on the name of Campbelltown due to the existence of several other communities in Canada within the same name, so the community’s name was changed to Sherwood Park in 1956.
Geography

The Sherwood Park Urban Service Area is located in the Edmonton Capital Region along the western edge of central Strathcona County adjacent to the City of Edmonton.[8] The majority of the community is bound by Highway 16 (Yellowhead Highway) to the north, Highway 21 to the east, Highway 630 (Wye Road) to the south, and Anthony Henday Drive (Highway 216) to the west. The Refinery Row portion of Sherwood Park is located across Anthony Henday Drive to the west, between Sherwood Park Freeway and Highway 16. Numerous developments fronting the south side of Wye Road, including Wye Gardens, Wye Crossing, Salisbury Village and the Estates of Sherwood Park, are also within the community. Lands north of Highway 16 and south of Township Road 534/Oldman Creek between Range Road 232 (Sherwood Drive) to the west and Highway 21 to the east are also within the Sherwood Park urban service area.

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