Oilsands emissions capped at 100 megatonnes a year under new bill

Greenhouse gas emissions from the Alberta oilsands will be capped at 100 megatonnes a year under new proposed legislation introduced Tuesday by the NDP government.

In 2014, oilsands accounted for 66 megatonnes of emissions, 24 per cent of Alberta's total, and 9 per cent of the Canadian total for that year.

The government says the limit was agreed to by representatives of the oilsands industry and environmental groups. There was no limit before.

"It is seen as a reasonable approach to allow growth within the oilsands but to enhance the market conditions and the drive towards taking the carbon out of the barrel," Environment Minister Shannon Phillips said in a news conference Tuesday.

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Under estimates from the National Energy Board, the oilsands aren't expected to hit the 100-megatonne level for 15 years.

But the goal is to remain under that limit by compelling oilsands companies to find innovative ways to extract bitumen. A $30 per tonne carbon price will apply to oil sands projectsbased on levels set by high-performing facilities.

Wildrose Leader Brian Jean said oilsands companies were voluntarily innovating without being forced to by a mandatory cap. He said the government's decision to set a cap will be a disincentive to investment in future oilsands projects.

"Having a hard limit is not the way forward, and not in the best interest of the international investment community," Jean said.

The proposed Oil Sands Emissions Act has exemptions for co-generation of theelectricity used at oilsands facilities. New upgrading facilities that had their first business year after or were expanded after Dec 31, 2015, will be subject to a separate 10 megatonne limit.

The bill also allows cabinet to approve exceptions for methods that result in low emissions such as small, experimental projects and primary production, which extracts bitumen through drilling without the use of heat or steam.

If the bill is passed, the cap would take effect as soon as the law is proclaimed.

The province is awaiting advice from the Oil Sands Advisory Group on implementation, regulations and keepingfuture projectswithin the limits.OSAGis expected to report to governmentin early 2017.