Thank you for inviting the Canada West Foundation to appear at your committee today.
The policy's purpose is to achieve emissions reduction. That's the central point of this policy and the Canada West Foundation certainly does not disagree with that purpose.
We also recognize there are many pathways to get there. There's no silver bullet. It's going to take carbon capture, energy efficiency, process improvements, fuel switching, electrification, renewables, nuclear, hydro, and new technologies on the horizon.
There are also many policy tools. Carbon pricing alone can't do it. We already have a complex mix of carbon pricing, cap and trade, methane regulations, fuel standards, emissions standards, incentives for innovation, investments in new technologies like carbon capture, and then there are emission caps.
As one of the big emitters, emissions reductions from oil and gas sectors is a big part of the solution. A 2020 Canada West Foundation report found that 43% of all emissions regulations in place across the country at that time specifically addressed the oil and gas sector and that number increases to 65% when you include large emitters.
You also, I am sure, are aware that Alberta already has an emissions cap for the oil sands. A 100 megatonne cap was introduced in 2015 as part of the climate leadership plan. The Oil Sands Emissions Limit Act remains in place despite changes to other climate policies since then. Since then, other provinces have enacted targets or caps or cap and trade programs.
Before extending this tool across the entire oil and gas sector across several provincial jurisdictions, I would like to bring three points to the committee's attention as it considers whether there are sufficient expected benefits from this proposed policy to compensate for the additional costs to producers and the economies of producing provinces and the rest of Canada.
The Alberta cap works because there is room for growth under the cap. It supports economic growth and innovation to reduce emissions, so the environment and the economy are explicitly recognized in the design of that cap. It's one thing to regulate 35 oil sands sites with six producers, but it's a whole other thing to regulate 200,000 sites across different provincial jurisdictions to establish this cap.
Finally, this additional regulation will create even more complexity, uncertainty and federal-provincial wrangling. The Supreme Court decision on the Greenhouse Gas Pollution Pricing Act was narrow. This proposal is very broad. There will be federal-provincial battles over the cap. There will be battles over measurement and the validity of the policy itself, none of which is good for investment required in new technologies to reduce emissions or for the economy. Uncertainty is the reason Teck declined to proceed with the Frontier oil sands mine in 2020, and that was only [Technical difficulty—Editor] of emissions. Uncertainty is the reason Canada has one LNG facility, which is under construction, while Australia has 16, the U.S. has seven, and the rest of the world has 70 LNG facilities.
Are these benefits primarily symbolic? Canada and its provinces are already recognized leaders in emissions reduction policy. One has to ask what the value is of additional legislation that creates even more uncertainty and distracts from the business of implementing existing policies.
I will cede the rest of my time for additional questions.