Canada’s plan to boost oil exports won’t compromise climate goals – government source

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An oil pump jack pumps oil in a field near Calgary, Alberta, Canada July 21, 2014. REUTERS/Todd Korol

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OTTAWA/CALGARY, Alberta, March 23 (Reuters) – Canada will outline plans on Thursday to boost oil exports to help ease a tight global market following Russia’s invasion of Ukraine, but this increase will not undermine Ottawa’s long-term climate commitments, a government source says.

Federal Natural Resources Minister Jonathan Wilkinson will detail Canada’s plans at the International Energy Agency (IEA) meeting in Paris, the source said.

Wilkinson told Reuters earlier this month that the government was working with industry to find ways to increase pipeline use and boost crude exports, and pipeline company Enbridge Inc (ENB.TO) said she was ready to do “what she can”. Read more

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Canada, holder of the world’s third-largest oil reserves, is keen to help bolster long-term energy security as countries that previously depended on Russian oil and gas seek replacements under sanctions aimed at punishing the Russia for its assault on Ukraine. But the government has no intention of jeopardizing its climate goals.

“There is no real desire to move away from the focus on emission reductions and the environment. We are not throwing away the climate rulebook,” added the source, who has declined to be identified due to the sensitivity of the information.

A spokesperson for Alberta Energy Minister Sonya Savage said Canada could ship an additional 200,000 barrels per day (bpd), or about 5% of current exports to the United States and a fraction of the 3 million bpd of Russian supply that is expected to run out from April. Read more

Many producers, particularly in the oil sands of northern Alberta, where new multi-billion dollar projects take years to build, are reluctant to increase spending to dramatically increase production. Read more

Critics say Canada is failing to meet its climate targets.

In 2018, Liberal Prime Minister Justin Trudeau’s government bought the Trans Mountain pipeline to help producers struggling to get their crude to market.

Carbon emissions from the oil and gas sector have increased by 20% since 2005 and represent 26% of Canada’s total emissions, making it the country’s largest emitting industry.

The government has pledged to cut carbon emissions 40-45% below 2005 levels by 2030 and is expected to present a detailed emissions reduction plan by the end of March.

“What the Ukraine crisis has done is increase the focus on energy security,” said George Hoberg, a professor of public policy at the University of British Columbia.

“There will be a lot of pressure from the oil and gas sector (to grow the industry), but that would be inconsistent with Canada’s climate commitments.”

Next month, the government will decide whether to approve Norwegian oil company Equinor’s (EQNR.OL) Bay du Nord project off the coast of Atlantic Canada. Bay du Nord has approximately 300 million barrels of recoverable resources.

Environmental groups like the Sierra Club have accused the oil and gas industry of exploiting the Ukraine crisis to garner more support for the project.

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Reporting by Nia Williams in Calgary and Steve Scherer in Ottawa; Editing by Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.

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