Alberta’s plan to defy emissions cap raises concern over overreach and disclosure for energy companies

Alberta’s promise to assume control of the company’s greenhouse gas data in a fight against Ottawa’s oil and gas emissions cap would mean significant government overreach into private operations and create new legal risks for energy companies, legal experts say.

Alberta’s United Conservative Party government tabled a proposal Tuesday to use Premier Danielle Smith’s signature legislation, the Alberta Sovereignty Within a United Canada Act, in its fight against Ottawa’s proposed cap on oil and gas pollution. Mrs. Smith says the cap would represent an unconstitutional intrusion into provincial affairs, and she has vowed to fight it in court.

Other actions suggested by Ms. Smith includes seizing ownership of data Alberta oil and gas companies collect on greenhouse gas emissions at facilities, blocking access to energy facilities by federal officials and ensuring no provincial entity helps Ottawa implement or enforce the cap.

Federal Energy Minister Jonathan Wilkinson is standing by his decision to implement an emissions cap despite Alberta’s actions.

“You can’t actually believe the science of climate change and somehow say that every other sector of the economy actually has to do things to change, but the oil and gas sector doesn’t,” Wilkinson said in an interview Wednesday.

“It’s just ridiculous. And anyone who says that either doesn’t believe in climate change or just doesn’t care.”

All facilities that emit 10,000 tons per year or more of greenhouse gases are already required to report their annual emissions to the federal government under the Greenhouse Gas Reporting Program, which was established in March 2004.

Mrs. Smith said companies would be prohibited from releasing emissions information to anyone other than the Alberta government via a condition of their operating permit.

“Companies should look at this and thank us for this, for being willing to protect them from federal government overreach,” Ms. Smith Tuesday. “We expect this should be welcomed by the energy sector.”

Mr. Wilkinson said Wednesday he doesn’t understand the point of the province gathering information first.

“Either you’re going to pass on that data or you’re going to somehow manipulate that data – which wouldn’t be something that I think most people would think a prime minister-elect would consider doing,” he said .

Anna Johnston, an attorney with West Coast Environmental Law, said the list of proposed actions has little legal precedent and could put companies in legal jeopardy.

“If Danielle Smith were to put a fraction of the energy she’s putting into this political mudslinging into actually getting Alberta to drop its emissions, then maybe we don’t need this emissions cap at all,” she said.

Janetta McKenzie, the interim director of oil and gas at the Pembina Institute, an environmental think tank, said such action would be possible if the province would simply follow its own Emission reduction and energy development planwhich it released in 2023.

“It is difficult to put this plan to reduce emissions – and commitments from industry to invest in decarbonisation projects – with this backsliding on emissions regulation on the idea that there is no way to meet it and meet the cap without shutting down production,” she said.

Alberta takes fight with Ottawa to another level over federal emissions cap

Ottawa’s planned cap would limit greenhouse gas emissions from Canada’s oil and gas sector to 35 percent below 2019 levels. Mrs. Smith says it is impossible for the sector to meet the target without a production cut, but the federal government maintains firm targets are needed to spur action to reduce emissions.

The Pathways Alliance, a coalition of Canada’s largest oil sands companies, has pledged to bring emissions from production to net-zero by 2050. President Kendall Dilling said in a statement Wednesday that the proposed federal cap is “unnecessary, useless and will undermine existing climate policy.” “

However, neither Mr. Dilling or the Canadian Association of Petroleum Producers directly addressed the implications of the Alberta government’s latest plan to combat the cap.

Conor Chell, national head of environmental, social and governance (ESG) legal risk and disclosure at KPMG, said the move to limit emissions disclosures underscores the tension between the federal and provincial governments over oil and gas development and limiting greenhouse gases.

“The province claims that what they are proposing here will fall within the scope of its natural resources, while the federal government obviously takes the position that regulating emissions data is more related to the environment, which is an area of ​​dual jurisdiction,” he said.

The province taking control of emissions disclosures could put listed companies in the middle of that battle.

Canadian Securities Administrators, the umbrella group of provincial securities commissions, has said it will examine new standards being developed for carbon emissions disclosure, with the expectation that reporting will be made mandatory in some form. The Canadian Sustainability Standards Board is expected to release its guidelines shortly, and the CSA has said it will examine them as it formulates its regulations.

Meanwhile, Ottawa said last month it will require climate-related financial disclosures for large, federally incorporated private companies. Companies are also under pressure from their large institutional investors to share emissions data so it can be compared with peer companies in Canada and internationally.