CALGARY, Alberta (Reuters) – Canada’s oil sands need more emissions-cutting measures and monitoring, an official panel said on Friday in recommendations that could potentially raise costs in a high-cost region that international players have increasingly abandoned.
The report from the Oil Sands Advisory Group of the Alberta province, which lays out the blueprint for the 100-megatonne cap on emissions for the heart of Canada’s energy sector, is non-binding.
The Alberta government, which introduced the bill for the cap late last year, said in a statement that it will review the recommendations and hold consultations starting June 27.
Alberta’s economy is largely dependent on oil, and its government has said its carbon-managing measures are needed to gain federal approval for pipelines that help export its landlocked crude.
The advisory group outlined reviews for emissions-cutting that would be triggered as carbon output approaches the 100-megatonne cap. Facilities that exceed emissions limits could face a C$200 per tonne penalty, according to the report.
The advisory group also recommended requirements for new facilities and expansions to use the best available technology economically achievable to reduce emissions.
Companies should also be required to prepare plans on managing greenhouse gases and their use of technology, and high-emission intensity portions of resources should be left in the ground if possible, the group said.
The vast oil sands deposits in northern Alberta are home to the world’s third-largest crude reserves, but also carry some of the highest production costs.
International oil companies including Royal Dutch Shell PLC RDSa.L and ConocoPhillips (COP.N: Quote) have sold off billions in assets to Canadian producers since the start of 2017, stoking concerns about the future of the resource.
(Reporting by Ethan Lou; Editing by Leslie Adler)