globeandmail.com

Alberta plan expected to go easy on big emitters

Thursday, January 24, 2008

SHAWN McCARTHY AND NORVAL SCOTT

OTTAWA and CALGARY -- The Alberta government will unveil a climate change policy today that is expected to shift the focus from the oil industry and coal-fired power utilities to consumers.

As the premiers prepare for a climate change summit in Vancouver next week, Alberta Premier Ed Stelmach is releasing a broad plan that is expected to focus on efficiency, renewable energy and technological approaches to carbon management.

The plan, which follows regulations imposed last year on the province's big industrial emitters, will offer incentives to consumers for energy efficiency and conservation, as well as the use of the alternative energies.

Mr. Stelmach, who is expected to call a provincial election in the next few weeks, will not, however, meet environmentalists' demands to impose tougher caps on large final emitters - mainly the oil industry, utilities and petrochemical plants.

The consumer-centred plan is likely to be well received by industry. Alberta's energy firms have long scorned proposals to put an overall cap on emissions, saying such a move would place an undue burden on attempts to develop the oil sands.

The province needs to change the subject in the climate change debate - away from the oil sector - to talk about a broader effort by society, said Roger Gibbons, head of the Calgary-based Canada West Foundation, a non-profit think tank.

He noted that the province last year imposed greenhouse-gas-emission regulations, and said without consumer measures, the final-emitter regulations would be "a dangerous overall strategy for Alberta to pursue." Such a move, he said, would "really paint a target on the provincial energy sector. We need people to realize that there has to be some large public response rather than focusing on the big emitters."

In Canada, major industrial emitters account for 53 per cent of greenhouse gas emissions, according to the federal Auditor-General. That figure is significantly higher in Alberta, which relies on coal for most of its electricity and is enjoying a boom in energy-intensive development in the oil sands.

Alberta has argued that all Canadians should play a role in carbon reduction.

Dr. Gibbons said he does not anticipate the province will introduce tougher targets for industry, which has just begun the job of meeting requirements imposed last year.

As of Dec. 31, 2007, those industrial sources were required to have reduced the intensity of their emissions by 12 per cent - on a per-kilowatt or per-barrel basis - when measured against an average of levels from 2003 to 2005.

At the end of March, they will have to pay $15 for every tonne they emit beyond their limit. That money will then flow into a technology fund, which will be used to finance emission-cutting investments.

Mr. Stelmach is expected to raise the prospect of more provincial funding for technology. The oil industry will be watching for signs of whether the province will finance a carbon-capture-and-storage pipeline. With such a line, companies could capture CO{-2} emissions and pipe them to other firms that would inject the greenhouse gas underground to enhance oil recovery.

Christine Schuh, a climate change adviser at PricewaterhouseCoopers LLP in Calgary, said companies are keen to find out how Alberta's technology fund will be allocated, to see whether money they are paying in will be recycled to help them meet their targets.

Ottawa has also proposed a technology fund that companies could pay into in order to meet some portion of federally regulated targets. It has provided few details about how it will be managed.

Alberta Liberal leader Kevin Taft said the government lacks credibility on the climate change issue and demanded a more "ambitious response," particularly with regard to the province's largest emitters, its aging coal-fired power plants.

"Our view is that an absolute cap on emissions within five years is crucial and actually doable," Mr. Taft said.

Mike Hudesma, an Edmonton-based representative for Greenpeace Canada, is looking to halt development of the oil sands altogether.

"We're definitely disappointed. This caters to the wishes of big oil while failing to address the growing concerns of global warming and climate change."

Friday, January 25, 2008, page B2

CORRECTION

The head of the Canada West Foundation is Roger Gibbins. Greenpeace Canada's representative in Edmonton is Mike Hudema. The names were incorrectly spelled in an article yesterday.