Federal Environment Minister Steven Guilbeault says the oil and gas industry will have to cut emissions by at least one-third by 2030. Ottawa says in order to continue to respond to a global demand for oil and gas, facilities will be able to buy a limited amount of carbon offset credits or contribute to a decarbonization fund, which would hold them accountable for a limited volume of emissions above the greenhouse gas pollution cap.

Saskatchewan’s Premier issued a statement from COP28 in which he points out that instead of taking the opportunity to promote Canada’s sustainable oil and gas industry on the world stage as Saskatchewan is doing, the federal government’s response has been to impose two new policies just this week, on methane and an oil and gas cap.

Moe says Saskatchewan has exclusive legislative jurisdiction under Section 92A of the Constitution Act, 1867 over the exploration of non-renewable natural resources and exclusive authority to regulate the greenhouse gas emissions. And he points out the emissions cap targets Canada’s upstream oil and gas sector, which the Premier says is already impacted by federal carbon pricing, increasingly stringent federal methane regulations, and the federal Clean Fuel Regulations and Clean Electricity Regulations.

The federal government acknowledges that the greenhouse gas pollution cap would regulate upstream oil and gas facilities which includes offshore facilities. It also applies to liquefied natural gas facilities. The emissions cap will cover activities such as oil sands, conventional oil production, natural gas production and processing, and production of liquified natural gas.

The federal government’s “Roadmap” says Canada is presently the world’s fourth largest oil producer and fifth largest gas producer.  In 2022, the oil and gas sector represented 30 per cent of the total value of Canadian exports.  As well, the oil and gas sector directly and indirectly employed 412,600 Canadians while also being the largest private sector employer for Indigenous Peoples in Canada, with approximately 10,800 Indigenous people working in the sector in 2022. With all that in mind the federal government says these targets make Canada more competitive. “As the world moves to reduce emissions generated by the production and combustion of fossil fuels, oil and gas extracted with the lowest production emissions are expected to be in the highest demand.”