Alberta’s vow to assume control of corporate greenhouse gas data in a fight against Ottawa’s oil and gas emissions cap would mean significant government overreach into private operations and create new legal risks for energy companies, law experts say.
Alberta’s United Conservative Party government tabled a motion on Tuesday to use Premier Danielle Smith’s signature legislation, the Alberta Sovereignty Within a United Canada Act, in its battle against Ottawa’s proposed cap on oil and gas pollution. Ms. Smith says the cap would represent an unconstitutional intrusion into provincial matters, and has vowed to fight it in court.
Other actions proposed by Ms. Smith include seizing ownership of data that Alberta oil and gas companies collect about greenhouse gases at facilities, barring entry to energy facilities by federal officials, and ensuring no provincial entity helps Ottawa implement or enforce the cap.
Federal Energy Minister Jonathan Wilkinson is standing by his decision to implement an emissions cap despite Alberta’s actions.
“You can’t actually believe in the science of climate change and say somehow every other sector of the economy actually has to do things to change, but the oil and gas sector does not,” Mr. Wilkinson said in an interview Wednesday.
“That’s just ridiculous. And anybody who says that doesn’t believe in climate change or just doesn’t care.”
All facilities that emit 10,000 tonnes per year or more of greenhouse gases must already report their annual emissions to the federal government under the Greenhouse Gas Reporting Program, which was established in March, 2004.
Ms. Smith said companies would be banned from handing over emissions information to anyone but the Alberta government via a condition on their operational licence.
“Companies should look at this and thank us for this, for being willing to protect them from federal government overreach,” Ms. Smith said Tuesday. “We’re anticipating that this should be welcomed by the energy sector.”
Mr. Wilkinson said Wednesday he doesn’t understand the point of the province collecting information first.
“Either you’re going to pass that data on, or you’re going to somehow manipulate that data – which would not be something that I think most people would think an elected premier would think about doing,” he said.
Anna Johnston, a lawyer with West Coast Environmental Law, said the list of proposed actions has little legal precedent and could place companies in legal jeopardy.
“If Danielle Smith were to put a fraction of the energy that she uses for this political mud slinging into actually getting Alberta to drop its emissions, then we might not need this emissions cap at all,” she said.
Janetta McKenzie, the interim director of oil and gas at the Pembina Institute, an environmental think tank, said such action would be possible were the province to simply follow its own Emissions Reduction and Energy Development Plan, which it released in 2023.
“It is difficult to square this plan to reduce emissions – and commitments from industry to invest in decarbonization projects – with this pushback to emissions regulation on the idea that there’s no way to meet it and comply with the cap without shutting in production,” she said.
Alberta takes its fight with Ottawa to another level over the federal emissions cap
Ottawa’s planned cap would limit greenhouse gas emissions from Canada’s oil and gas sector to 35 per cent below 2019 levels. Ms. Smith says it’s impossible for the sector to meet the target without a production cut, but the federal government maintains that firm targets are necessary to spur action on emissions reduction.
The Pathways Alliance, a coalition of Canada’s largest oil sands companies, has pledged to bring emissions from production to net-zero by 2050. President Kendall Dilling said in a statement Wednesday that the proposed federal cap is “unnecessary, unworkable and will undermine existing climate policy.”
However, neither Mr. Dilling nor the Canadian Association of Petroleum Producers has directly addressed the implications of the Alberta government’s latest plan to fight the cap.
Conor Chell, national leader of environmental, social and governance (ESG) legal risk and disclosure at KPMG, said the move to restrict emissions information underscores the tension between the federal and provincial governments over oil and gas development and limiting greenhouse gases.
“The province is arguing that what they’re proposing here would fall within the scope of its natural resources, whereas the federal government obviously is taking the position that regulation of emissions data is more related to the environment, which is an area of dual jurisdiction,” he said.
The province taking control of emissions disclosure could put publicly listed companies in the middle of that fight.
The Canadian Securities Administrators, the umbrella group of provincial securities commissions, has said it will examine new standards being developed for disclosing carbon emissions, with the expectation that reporting will be made mandatory in some form. The Canadian Sustainability Standards Board is expected to release its guidelines shortly, and the CSA has said it will examine those when it formulates its rules.
Meanwhile, Ottawa said last month that it will require climate-related financial disclosures for large, federally incorporated private companies. Corporations are also under pressure from their major institutional investors to share emissions data, so it can be compared with peer companies in Canada and internationally.
