By Canadian Press

Court ruling on federal carbon price both clarifying and worrying: expert

Mar 25, 2021 | 10:47 AM

CALGARY – An Alberta oil and gas industry expert says the Supreme Court of Canada’s ruling that the federal carbon price is constitutional raises questions about Canada’s ongoing ability to compete with other energy producers around the world.

Richard Masson, an executive fellow at the University of Calgary’s School of Public Policy, says the ruling represents a shift in power to Ottawa from the provinces which produce most of Canada’s oil and gas and have the most expertise in regulating, promoting and understanding the industry.

He says that’s a worry because if the price on carbon is set too high to encourage people to use less fossil fuel, it will allow producers in countries with lower standards to grab market share away from Canadian companies.

Masson says the ruling does provide needed clarity for the industry going forward, pointing out that a new oilsands project could be expected to produce oil for 30 or 40 years and builders want to have as much certainty as possible before committing billions of dollars in capital.

He says he thinks the industry can adapt to the new situation, which includes a carbon price expected to grow from $50 per tonne in 2022 to $170 per tonne by 2030, in part by continuing to improve efficiency and lower energy use to improve emission intensity.

He says it’s possible Canada can increase production by about one million barrels per day over the next decade even with higher carbon pricing, although that will make it more difficult for the country to meet its emission reduction goals.