Saskatchewan announced it is investigating the impacts of a federal oil and gas emissions cap and methane regulations to see how it will affect the province economically.
The province referred the federal oil and gas emissions cap and federal Methane 75 regulations to the Saskatchewan Economic Impact Assessment for review.
“These measures, which constitute a production cap by default, are duplicative and inefficient,” Justice Minister and Attorney General Bronwyn Eyre said. “They ignore local realities and diversity of production methods across the country. Their imposition, with no consultation, is another example of gross federal overreach into provincial jurisdiction and flies in the face of growing momentum against federal regulation of specific provincial industries by the courts. It is also our position that a cap-and-trade system does not fit under the federal criminal law power.”
The national cap-and-trade system for the upstream oil and gas sector was announced last December as well as Methane 75.
Methane 75 mandates the reduction of methane emissions by 75 per cent by 2030. The mandate includes fines and penalties for provinces that don’t reach the goal.
“All sectors of our economy need to reduce their emissions, and that includes oil and gas companies,” federal Environment Minister Stephen Guilbeault said at the Dubai COP28 conference in December 2023. “The Government of Canada’s plan to cap and reduce emissions from Canada’s largest emitting sector is ambitious, but practical. It considers the global demand for oil and gas—and the importance of the sector in Canada’s economy—and sets a limit that is strict, but achievable.”
The province said Saskatchewan’s emissions from the upstream oil and gas sector are already provincially regulated.
It also said in a release that since 2019, the provincial energy sector has reduced greenhouse gas emissions from reported venting and flaring at oil facilities by 64 per cent below 2015 levels, including an overall 70 per cent reduction in methane emissions.
Saskatchewan Energy and Resources Minister Jim Reiter said the federal policies will restrict and shut in Canadian oil and gas production.
“These policies are unnecessary, costly and create enormous uncertainty for business,” Reiter said. “The unfortunate reality is that these policies will restrict and shut-in Canadian oil and gas production, increasing our reliance on imported energy products.”
According to the province, compliance with the cap and Methane 75 will cost Saskatchewan’s energy sector between $7 and $9 billion by 2030.
On Monday, the province referred the cap and regulations to the Saskatchewan Economic Impact Assessment to investigate what impact they will have on the province.
Panel members will review the economic impact of implementing the regulations, including the impact on investment, production, royalty tax revenues and the costs required to comply with the regulations.
Under the Saskatchewan First Act, the findings from the independent tribunal can be used as evidence in court.
The findings report is expected to be released on May 15.