The oily backroom campaign to sink the federal emissions cap

The federal government faced fierce external pressure to abandon or weaken its plan to cap oil and gas sector emissions from provincial governments and industry lobby groups in the lead-up to its announcement last week.

Oil industry players averaged more than two lobbying meetings per workday over the past year. Collectively, Pathways Alliance, the Canadian Association for Petroleum Producers and Canada’s six largest oilsands companies recorded 499 meetings from January through October, Canada’s National Observer found by searching the federal lobbyists registry. The onslaught of lobbying catalogued exceeds 1,000 meetings when the search is expanded to include 30 companies and industry groups, Environmental Defence, a climate advocacy group, found in a recent analysis.

Although environmental groups largely celebrated the framework as an important step forward — Canada is the first country to introduce such a policy — concerns about further delays and details of the design remain.

NDP environment and climate change critic Laurel Collins called the Liberals’ framework to cap emissions from oil and gas production “unbelievably disappointing.”

“It's so disheartening. They have clearly listened to oil and gas executives and lobbyists who have been pushing for loopholes and the watering down of what could be an incredibly important policy to meet our climate commitments,” said Collins in an interview with Canada’s National Observer.

“Honestly, I get the sense sometimes that the environment minister doesn't have the sway or the power to make the change and make the decisions that will protect our environment and climate,” said Collins. Because of this, it's not enough to just push Environment Minister Steven Guilbeault, you have to push the Prime Minister’s Office and the government as a whole, she said. A subset of Liberal MPs, led by Patrick Weiler, last month similarly urged Prime Minister Justin Trudeau and his cabinet to move faster on the regulations.

Green Party Leader Elizabeth May called the framework “a major victory for Canada's oil and gas lobbyists."

"This cap, which was clearly designed not to hinder the growth of Canadian fossil fuel production and will only come into effect in 2026, is a violation of our Paris commitment and a theft of our children's future," she said in a statement.

May said it's out of step with the climate science, which to avoid catastrophic warming, requires emissions from the oil and gas sector to peak by 2025 and fall from there in line with the Paris Agreement’s goals of holding global warming to 1.5 C above pre-industrial levels.

The federal government has been pushed by hostile provincial governments on this issue. Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe have consistently waged war on a suite of federal climate policies, including the oil and gas emissions cap, which they characterize as an attack on oil and gas production. Smith has threatened to take the federal government to court for a slew of climate policies, including the cap.

A recent Supreme Court ruling found some language in the federal impact assessment law overstepped federal jurisdiction, which Guilbeault said prompted further examination of the oil and gas emissions cap framework.

Collins said this was a poor excuse for “watering down” the emissions cap because Alberta’s premier has made it abundantly clear she will fight the oil and gas emissions cap everywhere — including in court.

The Pathways Alliance, a lobby group representing the six-largest oilsands producers (Suncor, Imperial Oil, Cenovus Energy, MEG Energy, Canadian Natural Resources and ConocoPhillips Canada), did not immediately reject the emissions cap framework, but said it is unnecessary and unhelpful.

“While we recognize that the federal government adjusted some of the aggressive oilsands targets suggested in the Emissions Reduction Plan after analysis showed they were not technically achievable, we still need a greater understanding of how the cap integrates with other policies to support our emission reduction investments,” Pathways Alliance president Kendall Dilling said in a statement. Dilling said the group would take time to “analyze” the government’s plan “to determine how it may impact oilsands operations.”

The alliance was founded in 2021 with the stated goal of reaching net-zero greenhouse gas emissions in oilsands operations by 2050. To achieve this, it wants billions more in public funding for its flagship carbon capture project.

The Canadian Association of Petroleum Producers (CAPP) consistently takes a harder line than the Pathways Alliance, which is mainly focused on petitioning the federal government to fund its carbon capture project. CAPP is a staunch opponent of the oil and gas emissions cap and has a history of funding ads attacking the policy.

CAPP president Lisa Baiton says the forthcoming regulations would “effectively” cap the production of fossil fuels and that the “trajectory and target remain problematic for industry as technology pathways will be challenging by 2030.”

“CAPP believes the proposed policy risks triggering unforeseen socioeconomic consequences, not the least of which is likely to be higher energy prices for Canadians,” reads the statement. “CAPP will raise our concerns through the consultation process and continue our efforts to work with the federal and provincial governments to ensure the draft framework … does not become a cap on Canadian oil and natural gas production, allowing industry to continue its path of emissions reduction while growing Canada’s role as a secure provider of responsibly produced energy.”

Oil and gas is the largest emitting sector in Canada, accounting for 28 per cent of emissions, and rising. The sector’s emissions have increased 88 per cent from 1990 to 2021, drowning out progress made in other sectors like electricity, which saw a 45 per cent reduction over the same period.

Guilbeault said to expect the draft regulations, which have been repeatedly delayed, in the first half of 2024.

The Liberals “should have really come out with draft regulations already” and are “making a mistake” by not doing this rapidly, said Laurie Adkin, a professor of political science at the University of Alberta.

The federal government is creating ample opportunities for provincial and industry opponents to mobilize and try to further dilute the regulations, Adkin told Canada’s National Observer in a phone interview. Acting faster could have “[kneecapped] the army of opponents that are going to be taking every opportunity to try to defeat the government and water down the regulations.”

The framework proposed last week plans to cut pollution from the oil and gas sector by placing a limit on the emissions oil and gas companies can produce in 2030. However, the limit is softened by allowing companies to buy carbon offsets or put money into decarbonization funds for 20 per cent of the pollution they release.

The federal government says it “worked closely with industry to set a realistic and technically achievable goal for the sector” that will see the sector decrease 20 per cent to 23 per cent below 2019 emission levels while increasing production by about 12 per cent.

The rules won’t be phased in until 2026.

Adkin said the extended timeline also creates “a sense of hope on the part of the conservative parties that they can defeat the Trudeau government and elect [Pierre] Poilievre before they'll ever have to deal with this,” she said. “Taking things so slowly is not in the interest of either the climate or [the] Liberal government.”

Oil and gas companies have used their considerable power to attempt to shape the emissions cap policy. From January through October, the Pathways Alliance registered at least 92 separate meetings with federal government officials, according to reports filed with the registry of lobbyists. Over that same period, CAPP recorded at least 86 meetings.

Pathways Alliance member companies separately recorded 321 meetings over the same period.

In October, the most recent month available, the Pathways Alliance registered 23 meetings — more than there are workdays, while CAPP recorded 12. The Pathways Alliance’s six member companies recorded an additional 45 meetings.

Because communication reports filed with the registry do not disclose what was discussed, Canada’s National Observer could not confirm exactly how many of the total lobbyists meetings specifically discussed the emissions cap. But informing politicians and senior civil servants of the group’s preferences for how the cap would work was specifically listed as a topic to discuss in the Pathways Alliance registration. Not every oil and gas company specifically mentions the cap, but each of them describes wanting to communicate with the federal government about a range of greenhouse gas emissions policies, according to their registrations.

University of Victoria environmental studies professor James Rowe says “the oil and gas lobby has already scored a victory by ensuring that regulations for capping actual oil and gas production remain taboo in Canada.”

From a climate science perspective, “it's bonkers to me that we're not talking about production,” said Rowe.

Collins panned the new framework in question period last week, saying it won’t even cut emissions enough to meet the Liberals' climate targets.

“I think that we just need to keep up the pressure, both as opposition parties and also civil society,” Collins told Canada’s National Observer. NDP critics, including Collins, communicate with ministers on issues outlined in the Liberal-NDP supply-and-confidence agreement, which includes advancing measures to significantly reduce emissions by the end of the decade.

“I've had conversations with MPs like Patrick Weiler and John Aldag and others who … I think, clearly sometimes want to do the right thing even if they might not have the power to make it happen,” said Collins, adding herself and Bloc Québécois MP Monique Pauzé are often pushing in the same direction in the federal environment committee.

The framework is “literally a licence to pollute until it is too late,” Pauzé said in question period last week. “Who drafted this plan, the oil companies?"