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Several small-sized Canadian oil and gas producers prefer to wait and see if Prime Minister Justin Trudeau and his Liberals will survive the 2025 election instead of investing a lot of money and cutting production now to start complying with a federal framework to slash emissions by 2030.
"Say that we would have to spend significant capital (to comply), we would have a look at, is this government going to survive and what are the chances of this legislation surviving?" Bonterra Energy's Pat Oliver told Reuters.
Small producers such as Bonterra Energy and Yangarra Resources are telling Reuters they are waiting to see if Trudeau and the Liberals would survive the next election, as they are currently trailing in the polls to the Conservatives, who oppose the emissions cap.
Earlier this month, Canada's federal government introduced a draft framework to cap pollution from the oil and gas sector to reduce emissions. The framework proposes to cap 2030 emissions at 35 to 38% below 2019 levels while providing compliance flexibilities to emit up to a level about 20 to 23% below 2019 levels.
The industry and the oil-producing province of Alberta slammed the emissions cap proposal, saying it would effectively cap oil and gas production.
"At a time when the country's citizens are experiencing a substantial affordability crisis, coincident with record budget deficits, the federal government risks curtailing the energy Canadians rely on, along with jobs and government revenues the energy sector contributes to Canada," the Canadian Association of Petroleum Producers (CAPP) said.
Alberta Premier Danielle Smith and Environment and Protected Areas Minister Rebecca Schulz said in a joint statement,
"With their pronouncement singling out the oil and gas sector alone for punitive federal treatment, Prime Minister Justin Trudeau and his eco-extremist Minister of the Environment and Climate Change Steven Guilbeault are risking hundreds of billions of dollars of investments in Alberta's and Canada's economies and core social programs, are devaluing the retirement investments of millions of Canadians, and are threatening the jobs of hundreds of thousands of Albertans."
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More