Exclusive-Top-emitting Canada oil sands site collects government relief from pollution payments

Rod Nickel
Updated ·3 min read
FILE PHOTO: Canadian Natural Resources Limited's Primrose Lake oil sands project is seen near Cold Lake, Alberta

By Rod Nickel

WINNIPEG, Manitoba (Reuters) - For three straight years, Alberta's government granted Canada's most emissions-intense oil sands facility reductions in payments that polluters are required to make for generating higher emissions than most of the industry, a government document shows.

From 2018 to 2020, Alberta lowered Canadian Natural Resources Ltd's (CNRL) costs for its oil-producing Peace River site to comply with provincial emissions requirements. Peace River's per-barrel emissions are triple that of the already-high oil sands average.

CNRL, Canada's biggest oil producer, which made C$2.1 billion ($1.66 billion) adjusted profit in the third quarter, is one of six companies to receive financial relief under Alberta's compliance cost containment program, which launched in 2018.

Alberta requires high-emitting facilities that pollute more than the industry benchmark to comply, either by buying emissions credits or offsets from better-performing facilities, or by paying into a government fund at the going rate for carbon emissions, currently C$40 per tonne.

The province's cost containment program, however, eases the financial pain for facilities whose compliance costs are greater than 3% of their sales or more than 10% of their profits, to prevent "economic hardship."

Alberta's Environment Department provided, at the request of Reuters, a list of companies that benefited from the program. Spokesman Tom McMillan said it would not disclose the amounts of the cost relief the companies received, calling them "commercially sensitive."

Greenfire Oil and Gas Limited and Athabasca Oil Corp, which run the second- and eighth-most emissions-intense Alberta oil sands sites, according to government records, also received cost reductions.

Alberta's government also lowered CNRL's compliance cost for its Hays gas plant in 2018 and 2019.

CNRL did not respond when asked the financial value of the carbon cost relief it received.

"As we advance technologies to reduce our carbon footprint at all of our facilities, we will continue providing local jobs and economic benefits," CNRL said in a statement.

Countries that produce fossil fuels face the challenge of cutting emissions without damaging their economies. But Alberta's policies are "particularly egregious" for prolonging the life of high-emitting facilities, said Dale Marshall, national climate manager at Environmental Defence.

Emissions-intense, outdated oil facilities continue to operate despite government attempts to curb emissions.

Environment Minister Jason Nixon defended Alberta's efforts.

"It is a made-for-Alberta system that works with, not against, our key industries."

Canada is the world's fourth-largest oil producer and the oil and gas sector is also the country's biggest emitter. That makes it a critical challenge for Prime Minister Justin Trudeau as he aims to cut Canada's national greenhouse gas emissions by 40-45% by 2030 from 2005 levels.

Reductions to carbon cost obligations like CNRL's come in two ways. First, the Alberta government can allow such facilities to buy more carbon credits and offsets to meet their obligations than the 60% limit in place for other facilities. This saves companies money since credits and offsets are typically cheaper to acquire than paying the carbon price.

Secondly, the government can increase a facility's allowable emissions per year. CNRL, whose C$65 billion market cap is the highest of any Canadian oil and gas producer, received both forms of relief annually from 2018-2020, the document shows.

"There's always this tension around concern for jobs, but in this case, it's really questionable to me whether removing (the cost relief program) would actually lead to job loss" given the sector's strong free cash flows and dividends, said Sara Hastings-Simon, director of the University of Calgary's sustainable energy development program.

A natural gas plant owned by Keyera Corp, West Fraser Mills pulp facility, and an Enerkem biofuels plant also received relief. None of the companies, other than CNRL, responded to requests for comment.

($1 = 1.2652 Canadian dollars)

(Reporting by Rod Nickel in Winnipeg; Editing by Matthew Lewis)

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Fantasy Baseball Relief Pitcher Rundown: 8 key updates

    There has been some noteworthy movements in the fantasy baseball reliever landscape. Dalton Del Don breaks down the most important.

  • The best Amazon deals to shop this weekend: Save up to 90% on home appliances, gardening essentials and more

    A few of our faves? A Shark stick vac for just $100 and a vertical garden on sale for $34, plus sweet gift ideas for Mom.

  • People are forking out record $2,800 a month on average just to cover their mortgage payments

    The median monthly mortgage payment jumped 11% in the past year due to surging interest rates and soaring home prices.

  • Nvidia Stock Plummets In Broad Market Sell-Off

    Nvidia stock plunged Friday falling sharply below its 50-day average as the broader market retreated in a major sell-off.

  • Olympic torch makes Acropolis overnight stop a week before handover to Paris organizers

    ATHENS, Greece (AP) — The flame that will burn at the Olympics is spending the night at the ancient Acropolis in Athens, a week before its handover to Paris 2024 organizers. During a lull in heavy rain late Friday, a torchbearer lit a cauldron in front of the 2,500-year-old Parthenon temple, on the citadel that dominates the Athens skyline and is Greece’s top tourist draw. The flame will stay there until Saturday morning, when the champagne-colored torch travels to Delphi, an important ancient G

  • Stock market today: Tech stocks smoked, Nvidia tumbles 9% to cap worst week of the year

    A measure of calm was returning after Israel's retaliatory strike on Iran spooked the market and spurred a rush to safe havens such as gold.

  • As inflation cools, Macklem says different countries will cut rates at own pace

    OTTAWA — Bank of Canada Governor Tiff Macklem says central banks will make monetary policy decisions geared toward their own economies, which means some countries may begin cutting interest rates before others. Macklem made the comments while speaking to reporters on the sidelines of International Monetary Fund meetings in Washington, D.C. Friday. "We've all been resolute in our commitment to restore price stability, and we've matched those words with action that has helped us all bring inflatio

  • Lululemon to shutter Washington distribution center, lay off 128 employees

    Lululemon Athletica will close its distribution center in the state of Washington at the end of the year and lay off more than 100 employees, the apparel retailer told Reuters on Friday. The Vancouver-based firm will shutter the Sumner distribution center as part of its business optimization effort and cut 128 jobs beginning June 21, according to a WARN notice filed with the state's Employment Security Department. The move comes at a time when Lululemon is seeing slowing demand for its premium athleisure in North America, where excessive inventory levels at sporting retailers has resulted in lower orders for sportswear and apparel firms.

  • Debt, fiscal challenges facing low-income countries worry IMF

    Shareholders of the International Monetary Fund agreed this week on the importance of addressing challenges faced by low-income countries, many of which are facing unsustainable debt burdens, IMF Managing Director Kristalina Georgieva said on Friday. Multiple reports from the IMF and the World Bank this week sounded the alarm about economic developments and prospects in low-income developing countries, which are still grappling with the aftermath of the COVID-19 pandemic and other shocks. The IMF lowered its 2024 growth forecast for low-income countries as a group to 4.7% from an estimate of 4.9% in January.

  • Liberal and NDP MPs lament departure of longtime Tory MP as status of women chair

    OTTAWA — Liberal and NDP MPs are lamenting the loss of the longtime Conservative chair of the parliamentary committee on the status of women. Government members say they were disappointed to learn this week that Karen Vecchio would no longer be at the helm, after having first served as chair in 2017. The House of Commons' website shows Vecchio's role as committee chair ended this week, and on Thursday the Conservatives on the committee voted in fellow Tory MP Shelby Kramp-Neuman as her replaceme

  • Rebel Moon Part 2 review: A slow-mo sci-fi slog

    Rebel Moon: Part 2 - The Scargiver is an empty feast, a relentless onslaught of explosions, sci-fi tropes and meaningless exposition that amounts to nothing.

  • Friday’s White House briefing was unexpected in multiple ways

    From Israel and Iran to the man who set himself on fire outside the Trump trial, Press Secretary Karine Jean-Pierre had little to say

  • Trump's hush money trial, as seen through courtroom sketches

    Since it’s not being televised — and news photographers are only permitted in for 45 seconds at the start of each day — the only other images from inside the courtroom are portraits being done by sketch artists.

  • John Tortorella says he failed to get Flyers to 'close the deal' in wake of late-season collapse

    VOORHEES, N.J. (AP) — Put those playoff plans on hold, Flyers fans. And not just this season. Philadelphia is stuck on the outside of the postseason for the fourth straight year after its fate was decided in Game 82. The Flyers’ acceleration from expected painful rebuild to the cusp of the playoffs was faster than expected — especially among those whose opinions matter most, coach John Tortorella and general manager Danny Briere — which made the late-season freefall all the more puzzling and gut

  • Martha Stewart uses this fan-favorite Mario Badescu collagen mask to firm and tighten skin — and it's down to $14

    Reviewers love the mask, too: 'My skin is soft, even dewy ... it's really unbelievable!'

  • Man who set himself on fire outside Trump trial identified as ‘researcher’ who posted conspiracy-laden manifesto moments earlier

    The NYPD identified the man as Maxwell Azzarello, 37, who is now in critical condition in Cornell burns unit. He has a long history of posting conspiracy theories and railing against the rich and powerful

  • Max Azzarello posted anti-establishment conspiracies online. He set himself on fire outside Trump’s trial moments later

    The man was later identified by the New York Police Department as 37-year-old Max Azzarello from St Augustine Florida

  • Aparicio and revamped Atletico Ottawa looking to top Canadian Premier League table

    On his third stop in the Canadian Premier League, Manny Aparicio is closer to home and, hopefully, another title. The 28-year-old midfielder, born in Buenos Aires and raised in Toronto, joined Atletico Ottawa in the off-season from Pacific FC — part of a strong Ottawa recruiting class. "We have a lot of positions where no one can really feel relax and take their starting spot for granted, which is good to see," said Aparicio. "It's gelling well together," he added. "I don't really see any egos o

  • Mexican presidential frontrunner would focus on renewable energy, water

    Mexican presidential candidate Claudia Sheinbaum on Friday said that if elected, her administration would focus on water management and renewable energy as part of a plan to boost the country's sustainability. Speaking at a banking event on the country's Pacific coast, Sheinbaum added that she would also focus on developing areas for nearshoring, investing in industrial parks and boosting the country's freight and passenger train networks. The candidate for the ruling MORENA party, Sheinbaum is strongly favored to win the June elections and her campaign has centered on broadly continuing the policies of current President Andres Manuel Lopez Obrador.

  • UPDATE 1-Accident stops sugar loading at Brazil's Recife port, says company

    An accident with a shiploader at the sugar terminal in the Recife port in Northeastern Brazil suspended loading operations at the site, according to a note from shipping company Williams Brazil late on Thursday. The company said the shiploader collapsed and a part of the machine fell inside the cargo hold of a vessel that was docked at the port to load raw sugar. The press service at the Recife port confirmed the accident, adding that nobody was hurt.