On 7 December 2023, Environment and Climate Change Canada (“ECCC”) released A Regulatory Framework – To Cap Oil and Gas Sector Greenhouse Gas Emissions (the “Framework”) [1].  It sets out ECCC’s current proposal for the regulations that would cap and cut GHG emissions from oil and gas production. It addresses what climate advocates have been calling the “O&G Emissions Cap”.

The release of the Framework started an online public consultation by ECCC.  “Written submissions in response to this document should be submitted by email by February 5, 2024, to PlanPetrolieretGazier-OilandGasPlan@ec.gc.ca.” [2]

We hope, please, that you will make your own unique individual submissions to that consultation by 5 February 2024.  Climate-concerned citizens need to act to counter-balance the power of the Oil & Gas Lobby.  We made this Toolkit to help you do so.

The cap proposed by the Framework is not ambitious enough to begin with.  Its potential effectiveness is then seriously weakened by reducing the scope of emissions that it would cover and by the use of what the Framework calls “compliance flexibilities” or what some climate activists have been calling “loopholes” that will allow companies to emit much more than the cap (see graph below).

• Whereas the federal government’s Emissions Reduction Plan (the “ERP”) released on 29 March 2022 suggested the cap would be 110 Mt in 2030 [3], the Framework proposes “issuing a total quantity of allowances in 2030 of between 106 and 112 Mt CO2e [carbon dioxide equivalent]” [4].  We assume the cap will be 112 Mt (2 Mt more than what the ERP proposed) because almost every time the federal government proposes a range of numbers for an emissions target, everything they do thereafter focuses on the more lenient number.

• ECCC has also made the cap more lenient by reducing the scope of oil and gas production that will be covered by the cap. Downstream oil refineries and gas pipelines, responsible for 20 Mt of annual emissions, are not covered by this cap.

• In addition, ECCC will allow oil and gas producers to emit 25 Mt of annual emissions over and above the cap by buying carbon offset credits or paying into a “decarbonization fund”.

The net result is that, instead of reducing annual emissions from oil and gas production by 81 Mt, as called for in the ERP, ECCC will only require oil and gas producers to reduce annual emissions by 34 Mt (see graph below).

That is a reduction of 17% from total 2019 emissions of 191 Mt from oil and gas production, significantly less than half of the 42% of reductions from 2019 levels that was called for in the ERP [6].

Do not be fooled when the Framework states that ECCC’s proposal will result in emissions reductions that “would be 35% to 38% below 2019 emission levels” [7].  That is because they are not counting 45 Mt of annual emissions (20 Mt from downstream refineries and pipelines and 25 Mt of additional emissions from “compliance flexibilities”).

Saying the same thing another way, ECCC is effectively saying that, since the 25 Mt of emissions from “compliance flexibilities”will be “offset” by emissions reductions elsewhere, the only emissions coming from oil and gas production is the 112 Mt.  However, as will be discussed in section 6.0 below, those emissions reductions are far from certain.

At a time when the UNIPCC and the International Energy Agency have both said that no new fossil fuel infrastructure should be built if we are to limit warming to 1.5°C, climate-concerned Canadians might be surprised to know that the Framework is based on the assumption that fossil fuel production will increase between now and 2030.  Constitutionally, the federal government cannot limit oil and gas production because the provinces have exclusive jurisdiction.  However, the federal government must not be overly timid in the use of its power over reducing emissions. The cap level should be considerably more stringent.

In large part, this Framework is the result of enormous lobbying of the federal government by oil and gas producers.  This lobbying has been excessively one-sided, and has not been balanced by anything near an equivalent number of government meetings with environmental non-profit groups (“ENGOs”) or other climate-concerned Canadians.

Climate-concerned citizens must take this opportunity to tell the federal government that the Framework is unacceptable and that they must do better. All of us should make submissions to the online public consultation by 5 February 2024.

This Toolkit will explain how ECCC proposes to implement the O&G Emissions Cap, and its scope and size.  It will discuss some issues that climate-concerned citizens might see as problems with the Framework that should be fixed before ECCC publishes draft regulations later in 2024.  It will also suggest what those citizens might wish to consider including in their own submissions to the online public consultation.We do not expect anyone to read the entire Toolkit.  Just click on any of the links in the Table of Contents that interest you.  Each discusses specific issues with the Framework.  Learn as much or as little as you like.  We also encourage you to read any commentary that may have been put out by other Institutions, such as The Canadian Climate Institute, the Pembina Institute, CAN-Rac, and Environmental Defence.  Once you have done so, please make your submissions by 5 February 2024!